Alstom SA (ENXTPA:ALO) entered into a memorandum of understanding to Bombardier Transportation (Investment) UK Ltd from Bombardier Inc. (TSX:BBD.B) and Caisse de dépôt et placement du Québec for an enterprise value of €7.2 billion on February 17, 2020. After deducting la Caisse's equity position between €1.9 billion and €2.1 billion, Bombardier would receive net proceeds of between €3.9 to €4.1 billion, including €507 million of Alstom shares for a fixed subscription price of €47.5, monetizable after a three-month lock-up post-closing, subject to closing adjustments. Alstom SA entered into a definitive agreement to acquire Bombardier Transportation (Investment) UK Ltd from Bombardier Inc. and Caisse de dépôt et placement du Québec on September 16, 2020. The price for the acquisition of 100% of Bombardier Transportation shares will be €5.8 billion to €6.2 billion which will be paid via a mix of cash and new Alstom shares. A €75 million break-fee is payable at the termination of the memorandum of understanding by Alstom if it were not to pursue the transaction. Under the terms of the agreement, total proceeds after the deduction of debt-like items, transferred liabilities and estimated closing adjustments are expected to be €5.7 billion ($6.2 billion). After deducting la Caisse's equity position of €2.03 billion ($2.2 billion), Bombardier expects net proceeds of €3.7 billion ($4 billion), including €500 million ($585 million) of Alstom shares for a fixed subscription price of €47.50 per share, monetizable after a three-month lock-up post-closing. Under the agreement, Bombardier and la Caisse will sell their interests in Bombardier Transportation to Alstom on the basis of an enterprise value of ($8.4 billion) €7.15 billion, reflecting a €300 million ($350 million) price reduction after offset by the impact of a more favorable currency exchange rate.

The total equity component of the financing will represent approximately €5.1 billion, of which €2 billion will be raised on the market. €2.6 billion equity to be provided by Caisse de dépôt et placement du Québec through a reserved capital increase at closing, for a fixed subscription price of €44.45 per Alstom share. €0.5 billion equity to be provided by Bombardier Inc. through a reserved capital increase at closing, for a fixed subscription price of €47.5 per Alstom share. €2.4 billion bridge facility, fully underwritten by banks and the balance to be paid with Alstom existing cash on the balance sheet including Bombardier Transportation net cash at closing. Pursuant to the terms of the acquisition, Caisse de dépôt et placement du Québec currently holding approximately 36% of Bombardier Transportation, will become the largest shareholder of Alstom with approximately 18% of capital. Post completion, the employees of Bombardier Transportation will join the Alstom Group from January 29, 2021. 

The transaction is subject to execution of definitive documentation, clearance from relevant regulatory authorities, including competition and anti-trust authorities, the approval of the capital increase by Alstom's shareholders. On May 12, 2020, the transaction has been notified to The Competition and Consumer Commission of Singapore, which has invited public feedback on the transaction from May 15, 2020 to May 29, 2020. The European Commission which was initially due to rule on the deal in mid-July, has extended the deadline for its decision until July 31, 2020. As of July 31, 2020, the transaction remains subject to further regulatory approvals in several other jurisdictions and customary closing conditions. As of September 16, 2020, the transaction remains subject to regulatory reviews and other customary closing conditions, as well as Alstom shareholders' approval. The signing of the MOU has been unanimously approved by each of Bombardier and Alstom's board of directors, and the transaction announced today is fully supported by Caisse, who will become a new long-term shareholder of Alstom. The European Commission has approved the transaction on July 31, 2020. Competition and Consumer Commission of Singapore approved the transaction on August 14, 2020. As on August 20, 2020, the Australian Competition and Consumer Commission approved the transaction. As on September 9, 2020, The Administrative Council for Economic Defense approved the transaction. As of September 18, 2020, The Competition Commission of India (CCI) has approved the transaction. As of October 20, 2020, early termination notice from FTC has been received. As per announcement of October 29, 2020, Alstom's shareholders approved the capital increase for Bombardier. The existing terms of the transaction can be expired on October 31, 2020. The transaction is expected to close during first half of 2021. As of August 6, 2020, the transaction is expected to close in September 2020. As of September 16, 2020, the transaction is expected to close in the first quarter of 2021. As of December 1, 2020, all necessary regulatory approvals required to complete the sale of Bombardier Transportation to Alstom have been received. Bombardier and Alstom now expect the transaction to close on January 29, 2021. Bombardier intends to direct these proceeds towards net debt/cash position of Bombardier Transportation. The transaction is expected to be double digit EPS accretive from year 2 post closing from Alstom shareholders. Bombardier Transportation (Investment) UK Ltd has reported total assets $9.09 billion (€8.1 Billion), Revenues of $8.27 Billion (€7.37 Billion) and net loss of $142 million (€126.8 Million) for the year ended December 31, 2019.

Citigroup Global Markets Inc. and UBS Investment Bank acted as financial advisors, Norton Rose Fulbright LLP and Bernard E.Amory of Jones Day (Brussels), Florent Bouyer and Sophie hagege of Jones Day (France) acted as legal advisors to Bombardier Transportation (Investment) UK Ltd. National Bank of Canada (TSX:NA) and Rockefeller Capital Management L.P. acted as financial advisors to Bombardier's Board of Directors. Nicolas Bonnault, Brice Lemonnier, David Kakon, Vincent Danjoux, Stéphanie Arnaud and Jean-Baptiste Petetin of Rothschild & Co SCA (ENXTPA:ROTH) and Société Générale Société anonyme (ENXTPA:GLE) acted as financial advisors to Alstom. Société Générale, Crédit Agricole Corporate & Investment Bank and HSBC are acting as underwriters in the bridge and revolving facilities, with Société Générale also acting as Structuring and Coordinating bank. Pierre-Yves Chabert, Jeanne Theuret, Anne-Sophie Coustel, Antoine Winckler, Jérôme Hartemann, Caroline Hailey and Emmanuel Ronco of Cleary Gottlieb Steen & Hamilton LLP (France) is acting as the legal advisors to Alstom. HSBC Securities (Canada) Inc. acted as the financial advisor and McCarthy Tétrault LLP and Freshfields Bruckhaus Deringer LLP acted as the legal advisors to Caisse de dépôt et placement du Québec. Hemangini Dadwal and Akshat Kulshrestha of AZB & Partners acted as legal advisors for Bombardier Inc.

Morgan Stanley Bank Aktiengesellschaft acted as a financial advisor to Alstom SA. Philip Richter of Fried Frank acted as the legal advisor to Citigroup. Jean-Philippe Brillet, Valérie Schmit, Lucie Lebreton, Baptiste Allais, Elefterija Balkoska of PwC Société d'Avocats provided tax due diligence and Cédric Haaser, Philip Dykstra, Edouard Cartier, Frédéric Spielrein, Victor Giorgianni, Mark Cunanan, Abdelhamid Daoud, Benjamin Chabbert, Foucault Dunoyer, Paul Caro and Antoine Cassin of PwC Transaction Services and PwC Audit provided financial due diligence to Alstom. Sophie Delerm, Firas Abou Merhi and Sebastien Voisin of MAZARS Hemmelrath acted as a financial due diligence provider to Alstom. JPMorgan Chase & Co. acted as financial advisor to Alstom SA in the transaction.