Tuesday 27th Oct, 2020

CDPQ buys 30% of Bombardier Transportation

Chinese high speed train. Photo: Bombardier
Photo: Bombardier

Canadian plane and train manufacturer Bombardier has sold 30% of its rail business to investment firm Caisse de dépôt et placement du Québec (CDPQ) for US$1.5 billion in a fund-raising move.

The deal values Bombardier Transportation at US$5 billion – roughly AU$6.9 billion. Bombardier Transportation is Bombardier’s rail manufacturing business; it is separate from Bombardier Aerospace, the company’s plane manufacturing arm.

Under the terms of the deal, CDPQ will name three members to a seven-member board which will run Bombardier Transportation. The board will be chaired by Bombardier chief executive Alain Bellemare.

The move was chosen by Bombardier’s board of directors as “the most attractive option” following a review of financing options.

“The transaction announced today, when completed, will crystallize the value of Bombardier Transportation and strengthen Bombardier’s financial position, with no increase in debt,” the Canadian manufacturer said last week.

“The funds to be received by [new holding company] BT Holdco from the transaction will be distributed to Bombardier and Bombardier intends to use the proceeds for general corporate purposes.”

Bellemare added: “This investment by CDPQ, which has a long history as one of our major investors, is a testimonial to the growth potential of the rail industry and to Bombardier’s leadership in seizing the opportunities this market offers on a global scale.

“Bombardier and CDPQ have one common objective: leveraging Bombardier Transportation’s innovative portfolio of products and services, engineering talent and worldwide presence to drive margin expansion.”

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