Bombardier declares its selling spree over, officially

Bloomberg

With just one business left, Bombardier Inc has officially declared its selling spree over.
The Montreal-based company, which once made everything from snowmobiles to commercial aircraft, will focus solely on corporate jets following its announcement of two separate deals to sell off parts of its business in less than a week. And with the proceeds earmarked towards reducing a $10 billion debt load, CEO Alain Bellemare struck an upbeat tone after announcing the sale of Bombardier’s rail business to French train maker Alstom SA.
“It is a transformational deal for Bombardier,” Bellemare said during a call with analysts. “It marks the end of our turnaround and the beginning of a new and bright chapter for the company.”
Bellemare presided over many transactions, including the sale of its turboprop-plane business to Longview Aviation Capital Corp last year, as well as agreements to offload its regional-jet operation and a wing plant in Northern Ireland. Last week, he completed Bombardier’s exit from commercial aerospace by ceding its stake in the Airbus SE A220 program.
Bellemare touted Bombardier’s remaining business aviation portfolio, which includes its flagship Global 7500, the largest corporate jet.
After a two-year delay and cost overruns, delivery started in December 2018 and the company is now ramping up production. And that is not for sale, he indicated.
“We’ve completed the turnaround,” he said when asked about considering an offer for the division. “We wanted to ensure that we would have the right tools to de-leverage the business and this is what we’re announcing today. We really like our business aircraft business and we will continue to focus on this.”
The company’s aviation units employs more than 10,800 people in Quebec, anchoring an aerospace industry that’s more than 43,000-workers strong.
The provincial government, which retains a 20% stake in the A220 program and had vowed to protect Bombardier and Airbus jobs in the province, also went for a hopeful note.
“I understand what Quebeckers feel when seeing an important chapter of Bombardier’s history closing, but one has to look to the future,” Economy Minister Pierre Fitzgibbon said in a release.

Alstom buys Bombardier train unit for $6.7 billion
Bloomberg

French train maker Alstom SA agreed to buy the rail unit of Bombardier Inc for as much as 6.2 billion euros ($6.7 billion) to almost double in size, as the Canadian company offloads assets following a costly expansion in aerospace.
Alstom, based in Saint-Ouen, near Paris, will pay as little as 5.8 billion euros in the cash-and stock transaction outlined in a memorandum of understanding, according to a statement.
The acquisition is likely to add to earnings per share within two years and generate as much as 400 million euros in annual savings for Alstom within five years.
Combining with Bombardier Transportation would make Alstom the clear No. 2 in rail equipment and help it counter the industry leader, China’s CRRC Corp, which is increasingly targeting global sales.
Alstom is making a second attempt to bulk up, after a plan to merge with the rail unit of Germany’s Siemens AG was blocked last year by the European Union on antitrust considerations.