Bombardier has announced a $1.5 billion deal to sell a 30 per cent stake in its Transportation business to Canadian institutional investor CDPQ.
The transaction is slightly more complicated than it sounds. The agreement will see CDPQ acquire a convertible share investment in Bombardier Transportation’s newly created holding company, Bombardier Transportation (Investment) UK Ltd (“BT Holdco”).
BT Holdco will own all of Transportation’s assets and will be governed by a new board chaired by Alain Bellemare, Bombardier president and chief executive.
The agreement, which values Bombardier Transportation at $5 billion, will be reviewed annually and adjusted based on performance.
In a statement, Bombardier said: “The transaction announced today, when completed, will crystallise the value of Bombardier Transportation and strengthen Bombardier’s financial position, with no increase in debt.
“The funds to be received by BT Holdco from the transaction will be distributed to Bombardier and Bombardier intends to use the proceeds for general corporate purposes.”
