Companies

Alstom reduces offer price by $350 mln for Bombardier's rail unit

Credit: REUTERS/ARND WIEGMANN

French transport infrastructure company Alstom has lowered its offer price to acquire Canadian Bombardier Inc's rail business by $350 million, the companies said on Wednesday.

Adds details on deal, debt

Sept 16 (Reuters) - French transport infrastructure company Alstom ALSO.PA has lowered its offer price to acquire Canadian Bombardier Inc's BBDb.TO rail business by $350 million, the companies said on Wednesday.

Under the revised terms, the deal gives Bombardier's rail unit an enterprise value of $8.4 billion, which would allow the Canadian firm to pay down some of its $9.3 billion in debt.

Bombardier, which has been under pressure due to higher rail costs, said it expects net proceeds of about $4 billion from debt reduction and Canadian pension fund la Caisse's equity position of $2.2 billion. Last month, it reported a loss of $319 million after missing quarterly earnings estimates.

The loss prompted Alstom, which first made an offer in February for Bombardier's transportation business, to revisit the deal.

Alstom said in August the recent quarterly results point to Bombardier's transportation unit's ongoing challenges, but believes it can restore the unit's profitability in the medium-term.

In July, Alstom secured European Union antitrust approval to acquire the Bombardier rail business, in a deal worth up to 6.2 billion euros ($7.30 billion), aimed at making Alstom the world's second-largest rail maker after China's CRRC Corp 601766.SS.

(Reporting by Rachit Vats in Bengaluru; Editing by Shinjini Ganguli)

((Rachit.Vats@tr.com; within U.S. +1 646 223 8780, outside U.S. +91 80 61822828; Reuters Messaging: rachit.vats.thomsonreuters.com@reuters.net))

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