German locomotive and rail supply firm Knorr-Bremse has acquired Alstom Signaling North America, including its conventional signalling division. The move is Knorr-Bremse’s first into the control, command, and signalling (CCS) sector.
The company said the move was a marker of its transformation from a supplier of vehicle systems to a supplier of systems for the entire rail ecosystem. It said this was part of its resilience and growth programme “BOOST 2026”.
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The signalling segment will become part of the Knorr-Bremse Rail Vehicle Systems division.
Knorr-Bremse said the acquisition had several drivers, including “market entry barriers” that stopped its expansion outside of acquisition, and “large and continuous shares of the aftermarket” derived from the signalling ecosystem.
Board member Nicolas Lange explained the reasoning: “The CCS market is [worth] approximately €20bn globally, making it a highly attractive rail segment. For us as an international systems supplier, the transaction is a substantial step forward in electronics and digitalization in rail infrastructure. Brakes and signalling technology have a critical influence on the safety and capacity of rail transportation.”
The deal, which Knorr-Bremse said it expects to close in “summer 2024”, is worth approximately $671m. This included an undisclosed amount, “for additional expected and highly profitable project business.” The firm said it would finance the buyout with existing liquidity and debt balance.
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By GlobalDataCEO Marc Llistosella said the deal would insert Knorr-Bremse into a leading market position in the US.
“We will also become one of the US market leaders in North America in the rail control, command, and signalling segment, or CCS… The transaction pursues a compelling industrial logic and is a very good match for our development and growth path,” he added.
As a dominant player in US and Canadian signalling and train control, Alstom Signaling North America will build Knorr-Bremse’s train and locomotive-focused business as it moves toward fuller digital operations by providing a significant data stream.
“We are pleased to sign this agreement, which marks an important step in the implementation of our action plan. It evidences the work of our North American signalling employees, who have built and advanced this very successful business over the past few years”, said Henri Poupart-Lafarge, Alstom’s CEO.
