According to Bloomberg, Alstom and Bombardier Transportation are in talks about an eventual merger of their rail activities.
Bombardier Inc., the embattled Canadian train and plane maker, is exploring a combination of its rail business with French rival Alstom SA, according to people familiar with the matter.
The two companies have held preliminary talks about a rail deal in the past few months, said the people, who asked not to be identified because the discussions are private. Representatives for Alstom and Bombardier declined to comment.
Alstom rose as much as 2.1% in early trading in Paris Wednesday. Bombardier ended 5.7% higher in Toronto Tuesday, giving the company a value of C$3.18 billion ($2.43 billion).
The latest considerations between Bombardier and Alstom could face antitrust scrutiny, and there’s no certainty they will lead to a transaction, the people said. A rail deal is among several options the Canadian company is exploring to stabilize its portfolio, which also includes business jets, they said.
The deliberations started before Bombardier shocked the market last week by warning of disappointing fourth-quarter sales, according to the people. Bombardier also said at the time that it may exit a joint venture with Airbus SE that makes the A220 jetliner and potentially take a major writedown. Bombardier shares dropped as much as 39% on the news, a record decline.
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