Alstom results

EU clears Alstom’s acquisition of Bombardier

The European Commission (EC) has approved the acquisition of Bombardier Transportation by Alstom, subject to commitments made by Alstom.

Since the acquisition was announced in February 2020, discussions have been ongoing to determine how the merger of the two major rail manufacturing companies would satisfy EU merger laws.

Last month, Alstom proposed a range of measures to get the deal over the line, unlike the previously deal to merge with Siemens, which fell foul of EU antitrust laws.

In a statement, the EC accepted Alstom’s proposal, noting that the two companies compete in areas such as very high speed, mainline and urban rollingstock, as well as mainline and urban signalling.

With the acquisition approved, Alstom will sell its Coradia Polyvalent range of mainline trains and the associated production facilities in Reichshoffen, France. Bombardier’s Talent 3 train series will also be sold, and part of the production facilities for these trains in Hennigsdorf, Germany.

To satisfy EC concerns in the area of high-speed rail, Alstom will divest Bombardier’s stake in the Zefiro V300 joint venture with Hitachi.

In the field of signalling, Alstom will allow competitors access to some onboard signalling units.

EC executive vice-president Margrethe Vestager said the acquisition would enable continued competition in the European rail market.

“Going forward, a stronger combined Alstom and Bombardier entity will emerge. At the same time, thanks to these remedies, the new company will also continue to be challenged in its core markets to the benefit of European customers and consumers.”

In a joint statement, both companies welcomed the decision of the EC.

“The divestitures will comply with all applicable social processes and consultations with employee representatives’ bodies,” the statement read.

“The transaction remains subject to further regulatory approvals in several other jurisdictions and customary closing conditions.”

The Australian Competition and Consumer Commission (ACCC) has an ongoing review of the merger, which commenced on May 11. August 20 is set as the provisional date for the announcement of the ACCC’s findings.

When the acquisition is complete, expected by the first half of 2021, Alstom will be the second-largest rail-equipment firm, behind Chinese manufacturer CRRC. The combined Alstom and Bombardier Transportation company would have revenues of €15.5 billion ($25.58bn) and would create the European rail champion, which was proposed when Alstom attempted to merge with Siemens.

Alstom results

Alstom proposes divestments to satisfy EU merger laws

Alstom has announced its proposed commitments to respond to potential European Commission concerns regarding its purchase of Bombardier Transportation.

The commitments are part of the process to satisfy the European Commission’s merger regulations.

The actions that Alstom has proposed include the divestment of the Alstom Coradia Polyvalent line and its production facilities at Reichshoffen, in France, as well as the divestment of the Bombardier TALENT 3 platform and its production facilities in Heningsdorf, Germany.

Alstom has also proposed the transfer of Bombardier Transportations contribution to the V300 ZEFIRO very high-speed train.

In signalling and train control, Alstom has proposed to provide access to interfaces and products on some of Bombardier Transportation’s signalling on-board units and train control management systems.

The European Commission is now reviewing these commitments and will make a decision whether to further investigate the procedure by July 16. Third parties are invited to submit observations.

In a statement, Bombardier confirmed its support of the commitments. Both companies confirmed that the acquisition process is on track to be completed in the first half of 2021.

The two companies confirmed that Alstom would acquire Bombardier Transportation in February, 2020, following weeks of rumours. The value of the exchange is between $9.4 and $10 billion.

In Australia, the Australian Competition and Consumer Commission (ACCC) has begun a review of the merger and has set a provisional date for the announcement of findings of August 20. The ACCC will apply the legal test of whether the merger is likely to have the effect of substantially lessening competition in a market.

Bombardier

Filling the gap

Bombardier is helping rail operators achieve zero emissions on unelectrified track with its battery electric units while slashing lifecycle costs.

One of the key benefits of rail travel to the community is its low emissions. Whether powered via overhead lines or an electrified rail, trains offer fast, high volume mobility, and if powered by renewable energy, emissions free. That is, until the wire runs out.

In Australia, nationally there is 36,064 kilometres of track, but only a small portion of that in the major cities has an overhead power supply. In New Zealand, out of the total 4,128 kilometres of track, 589km is electrified. As the non-electrified sections of the network are often outside of major urban centres, getting regional travellers to travel by train presents the issue of running higher emitting vehicles, or undertaking costly electrification works on lines that have fewer services. These factors present an impediment to the zero emissions potential of rail transport, however one that is recently being overcome.

Launched in 2018, the Bombardier TALENT 3 train is a battery-electric multiple unit to fill the gap in-between electrification of entire rail networks and continued reliance on diesel-powered units. The TALENT 3 train can provide an operator with a 30 per cent reduction in the total cost of ownership, when compared to a conventional diesel multiple unit over a 30-year service life. The train is powered by Bombardier MITRAC traction batteries and can run on non-electrified lines for distances of up to 100km. The batteries utilise recent technological innovation in fast charging and high-density lithium ion batteries which can be charged in less than 10 minutes while running on an electrified section of track, or through recuperating otherwise lost energy when the train is braking.

The research and development work that went into the TALENT 3 train was supported by the German federal government, research institutions, and regional German transport operators. Additionally, the technology behind the train was developed by Bombardier in its Mannheim laboratory in Germany. The newly inaugurated €1 million ($1.72m) facility contributed to the battery components for the TALENT 3 train. In Europe, the demand for battery electric units is increasing, as shown in recent orders for trials of the trains in multiple countries.

In Germany, the innovation involved in the development and production of the TALENT 3 train was recognised in late 2018, when Bombardier won the Berlin Brandenburg innovation award. In particular the jury singled out the role that battery electric trains could provide to Germany’s non electrified network. The train could already operate on 30 per cent of the country’s non-electrified lines, and if cost- effective electrification was done at end points, 75 per cent of lines that currently run diesel-powered services could be operated with battery power.

Commenting on the project, Bombardier’s head of sales – Australia and New Zealand, Todd Garvey, highlighted how the train would overcome network limitations.

“It was Bombardier’s goal to develop a quiet and eco-friendly train for passengers, while also offering operators the best alternative to higher emittting diesel trains on both cost and safety aspects.”

In Australia and New Zealand, where there are already proposals for the electrification of sections of regional and intercity track, the Bombardier TALENT 3 train could readily operate on lines such as the Hunter Line, a variety of V/Line services in Victoria, and partially electrified sections of track in New Zealand. However, the flexibility of battery- electric trains enables new connections to be made.

“The BEMU – as we call it – has massive potential in the ANZ market as the cost barriers to deploy widescale electrification are considerable.

“Our BEMU provides operators and governments with a zero-emission alternative to diesel propelled vehicles across their extended networks. Once the electric line runs out, the batteries kick in and the vehicle can continue running as normal for up to 100 kilometres.

“The only additional infrastructure then would be strategically placed charging stations throughout the regional network that the vehicle can plug into, to recharge the battery,” said Garvey.

“This presents big savings and reduces the need for a large-scale civil works program. These battery trains are also quieter, and this is good in greenfield residential areas, for example, where diesel trains might not be the preferred option.”

The key to realising the benefits of battery trains is their flexibility. Not only do they reduce a network’s total emissions but eliminate the immediate impact of emissions caused by the trains themselves. Emissions from diesel powered vehicles can limit their use in inner city areas and confined spaces such as tunnels. In addition, Bombardier’s TALENT 3 can achieve a significant reduction in noise, when compared to conventional DMUs.

Combining the latest in battery technology and a pedigree of innovation, the TALENT 3 provides zero emissions mobility to a much wider audience.