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Alstom to take account of weak Bombardier results in deal talks

Stock MarketsAug 10, 2020 08:20
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© Reuters. FILE PHOTO: A logo of Alstom is seen at the Alstom's plant in Semeac near Tarbes

PARIS (Reuters) - French transport infrastructure company Alstom (PA:ALSO) said on Monday that it would take into account Bombardier's (TO:BBDb) weak results earlier this month as it continues with plans to buy the Canadian company's rail business.

In July, Alstom secured European Union antitrust approval to acquire the Bombardier rail business, in a deal worth up to 6.2 billion euros ($7.30 billion), aimed at making Alstom the world's second-largest rail maker after China's CRRC Corp (SS:601766).

Earlier this month, Bombardier reported a quarterly loss of $319 million.

"Alstom remains convinced of the strong strategic rationale for the acquisition of Bombardier Transportation and is confident in its ability to restore in the medium term the profitability and commercial performance of the business," Alstom said in a statement.

"However, the quarterly announcement points to unexpected and negative developments regarding Bombardier Transportation, which is currently facing challenges, especially when compared to the information available prior to the February 17, 2020 announcement regarding Alstom’s intended acquisition of Bombardier Transportation," Alstom said.

"Alstom will take into account the consequences of these operating and financial developments in forthcoming discussions with Bombardier Inc , and will update the market as required," the French company added.

Alstom shares were down by 2% in early session trading.

Alstom's success in gaining EU clearance for the Bombardier deal contrasted with its failed attempt last year to combine its rail assets with Siemens AG (DE:SIEGn), which was vetoed by regulators because the companies refused to offer more concessions.

Alstom to take account of weak Bombardier results in deal talks
 

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