Alstom has signed the sale and purchase agreement with Bombardier and CDPQ for the acquisition of Bombardier Transportation. Credit: © Alstom 2020.

Alstom has signed the sale and purchase agreement to acquire Bombardier’s rail division Bombardier Transportation with revised price terms.

The company signed the deal with Bombardier and Caisse de dépôt et placement du Québec (CDPQ), a key stakeholder in Bombardier Transportation.

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The revised terms reduce the price range by €300m.

Alstom will also pay between €5.5bn and €5.9bn to purchase 100% of Bombardier Transportation shares, excluding any additional downward adjustments linked to the net cash protection mechanism.

In a statement, Alstom said that the revision reflects the current situation.

According to a Reuters report, Bombardier’s poor quarterly performance prompted Alstom to revise the acquisition offer. The current Covid-19 pandemic may also have contributed to the move.

Now, Alstom estimates that the proceeds will amount up to €5.3bn, compared with the €5.8bn-€6.2bn range communicated in February.

However, the financial structure will remain the same where CDPQ become the largest shareholder of Alstom with around 18% of the share capital and voting rights.

Alstom chairman and CEO Henri Poupart-Lafarge said: “The acquisition of Bombardier Transportation represents a transformational change for Alstom.

“It will enable the group to accelerate on its strategic roadmap and strengthen its leadership in the context of a dynamic market, at a time where sustainable transportation is at the heart of the global agenda.”

Alstom expects to close the acquisition in the first quarter of next year, subject to regulatory approvals and customary closing conditions.

Last month, the European Commission (EC) gave conditional clearance to the deal. The deal has also received approval from Singapore’s competition watchdog.