MONTREAL —
Alstom has confirmed Monday it is in talks with Bombardier about the possible acquisition of Bombardier Transportation, which would include its rail industry and train division.
“Discussions are on-going. No final decision has been made,” the French company said in a short statement. “Alstom will inform the public of any material developments in this respect.”
Rumours have been swirling for weeks around whether or not Bombardier, which is trying to reduce its heavy debt, would sell its train division.
According to the Wall Street Journal (WSJ) on Sunday, a preliminary agreement worth more than US$7 billion has been reached between the two companies. It suggests Alstom will offer cash and stocks.
The WSJ also claims the Caisse de dépôt et placement du Québec (CDPQ), which owns 32.5 per cent of Bombardier Transportation, has agreed to sell its stake, and will then acquire a minority stake in the combined entity.
If sold, this would be the latest of many assets relinquished over the past five years by Bombardier president and CEO Alain Bellemare, including the Q400 turboprop aircraft, CRJ regional jets and the former C-Series.
The Quebec company has been dragging a long-term debt of US $9.3 billion and had announced last month that it was studying options to accelerate its deleveraging.
Unlike the aeronautics division, Bombardier Transportation’s head office is located in Berlin, Germany — making it much less present in Quebec.
It has 40,650 employees worldwide with 1,000 people at the La Pocatière plant in Bas-Saint-Laurent, as well as in Saint-Bruno, on the south shore of Montreal.
In a statement Monday, the Confédération des syndicats nationaux (CSN) argued it is up to the Quebec government to preserve jobs at its local facilities.
“It is unfortunate to witness the deconstruction of a Quebec company, built by thousands of workers here,” said CSN president Jacques Létourneau. “The important thing today is that the government has to use its power to maintain jobs at La Pocatière…the government has all the right cards in hand to ensure the development of the railway construction sector in Quebec.”
The trade union federation is also urging Quebec Premier François Legault to speed up the process of several local public transit projects, including Montreal’s Réseau express métropolitain (REM).
— with files from The Canadian Press.
