February 18, 2020 / 8:08 AM / 3 months ago

Alstom shares fall after Alstom's $6.7 bln Bombardier rail deal

PARIS, Feb 18 (Reuters) - Alstom shares fell on Tuesday after Alstom agreed to buy the rail division of Canada’s Bombardier for up to 6.2 billion euros ($6.7 billion), in a deal which could still face tough scrutiny from regulators and unions.

Alstom shares were down 2% in early session trading.

“We believe shares will now remain range bound amid the capital increase and uncertainty during a lengthy anti-trust process,” wrote analysts at JP Morgan, which cut its rating on Alstom to “neutral” from “overweight”.

The agreement between Alstom and Bombardier would unite companies with an estimated $17 billion in combined revenue.

A combination with Bombardier would give Alstom a share of between 40% and 60% of the European regional train market, according to estimates cited by union sources in France, well above Siemens at 10% to 20%.

But some analysts have said there could be less opposition to a deal this time as Alstom and Bombardier have a lower combined European market share in high-speed rail and signalling.

French trade unions issued a statement late on Monday to warn that the deal between Alstom and Bombardier must not result in major job losses in France.

Alstom boss Poupart-Lafarge himself said on Monday the acquisition would not affect jobs and that he was confident in achieving antitrust approval.

$1 = 0.9231 euros Reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below