Latest on Bombardier takeover by French engineering giant

A new deadline has been set by European Union regulators for a decision on a French firm’s takeover plans for Bombardier.

It is significant because the EU has previously blocked similar deals from taking place and has the power to do so again.

French train-maker Alstom is looking to takeover the Berlin headquartered firm, which has its UK train-making factory in Litchurch Lane, Derby.

Last month, a filing on the European Commission’s website showed it had set itself a deadline of July 16 to make a decision on whether to allow the deal to go-ahead.

Business Live reports the EU competition enforcer has now set a new deadline of July 31 after Alstom offered to sell assets to address competition concerns.

It will now seek feedback from rivals and customers of both companies before deciding whether to accept the package or demand more in line with its procedures.

Back in February, the parent company of Bombardier Transportation, confirmed it had agreed to sell the business to Alstom for up to 6.2 billion euros.

At the time, Bombardier Inc signed a memorandum of understanding with the French firm to sell its rail business in order to reduce its huge debts and focus on the business jet market.

However, the deal is subject to regulatory approval from the EU. The EU competition enforcer can either clear the deal with or without conditions or open a four-month long investigation if it has serious concerns.

If given the go-ahead, the combined business would create the world’s second largest train manufacturer, with the capacity to take on the top manufacturer, China’s CRRC Corp.

However, the EU regulator has previously blocked some attempts by train manufacturers to join forces. Last year, a planned tie-up between Alstom and Siemens collapsed due to European regulatory concerns.

European Union competition regulators blocked the Alstom-Siemens deal, fearing the tie-up would hurt competition and lead to higher prices for consumers.

This time around, some unions have voiced concern over the Alstom-Bombardier deal.

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Bombardier’s Derby site is currently busy delivering several major orders to key customers, including West Midlands Trains, Greater Anglia and South Western Railway.

The Unite union, which represents many workers at Litchurch Lane, has received assurances from senior executives at Bombardier about the future of the Derby train factory, which employs around 2,000 people. It is hoping to receive the same reassurances from Alstom.

If EU regulators give clearance, it is expected the deal could be completed during the first half of 2021.


Courtesy of Derbyshire Live – Derby News