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Alstom Signs MoU To Buy Bombardier Transportation For €5.8 Bln - €6.2 Bln

French speed-train maker Alstom (AOMFF.PK,ALS.L) announced that it has signed a Memorandum of Understanding with Bombardier Inc. and Caisse de dépôt et placement du Québec or CDPQ for the acquisition of Bombardier Transportation.

The acquisition price for Bombardier Transportation shares will be 5.8 billion euros to 6.2 billion euros. The consideration will be paid through a mix of cash and new Alstom shares.

CDPQ, which currently holds 32.5 percent of Bombardier Transportation, will reinvest around 2 billion euros corresponding to 100 percent of cash proceeds to be received from the sale of its stake and further invest 0.7 billion euros in Alstom.

Following the deal, CDPQ will become the largest shareholder of Alstom with about 18 percent of the capital.

Post-transaction, Alstom expects to have a backlog of around 75 billion euros, and revenues of around 15.5 billion euros.

The transaction is expected to be double-digit EPS accretive from year 2 post closing for Alstom shareholders.

Bouygues will remain an important shareholder of Alstom with around 10 percent of capital.

Subject to the EGM, rights issue will take place between H2 2020 and H1 2021 and the reserved capital increases will take place at closing.

The transaction will also be subject to clearance from relevant regulatory authorities and anti-trust authorities.

Closing of the deal is expected in the first half of 2021.

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