July 9, 2020 / 8:37 AM / a month ago

UPDATE 2-Alstom offers French factory sale to clinch Bombardier deal

(Adds union reaction, Bombardier comment)

PARIS, July 9 (Reuters) - France's TGV high-speed train maker Alstom on Thursday offered to sell a French rail factory and make other concessions to win European Commission approval for its planned purchase of Bombardier Inc's transportation business.

The commitments also included selling Alstom's regional train unit Coradia Polyvalent and divesting a Bombardier commuter trains division and the related production facilities at its Hennigsdorf site in Germany.

Alstom's bid in February of up to 6.2 billion euros ($7 billion) for Montreal-based Bombardier's rail business has faced scrutiny from EU antitrust authorities, which have been expected to demand concessions to approve the deal.

Alstom is offering more than it thinks is necessary in a bit to get the deal done, people familiar with the matter said.

Last year, EU regulators blocked Alstom's attempt to merge rail assets with Siemens AG.

By buying Bombardier's train division, Alstom is seeking to create the world's second largest train manufacturer to compete more effectively with Chinese leader CRRC Corp.

Alstom said it would sell its Reichshoffen regional train factory in eastern France, which employs some 800 staff, confirming a report by Reuters on Wednesday.

France's Force Ouvriere (FO) union said it opposed the plant's disposal and called on Alstom and Bombardier to maintain the jobs affected by the concessions plan.

In Germany, where Bombardier has big operations, the IG Metall union backed the principle of a merger in an interview with WirtschaftsWoche magazine but called for job guarantees.

The EU is due to decide whether or not to pursue a deeper enquiry on July 16, following its preliminary review of the deal.

Alstom's other concessions included providing access to some products within Bombardier's train control systems and signalling units.

Bombardier said separately it supported the concessions plan, and the deal was on track to close in the first half of 2021. (Reporting by Maya Nikolaeva and Sarah White in Paris and Foo Yun Chee in Brussels; Editing by Jane Merriman and David Evans)

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