Bombardier will receive less than expected from Alstom for its rail division

Bombardier announced Wednesday that it had reached a “definitive agreement” with the French giant Alstom which provides for a price reduction for the sale of its rail division.

The revised price assigns a value of 7.15 billion euros to Bombardier Transportation, 300 million euros less than the 7.45 billion euros expected when the transaction was announced in February.

Bombardier will derive US $ 4 billion from the operation when it was initially expected to receive US $ 4.2 to 4.5 billion.

The Quebec multinational has not clearly quantified the impact of the price change for the Caisse de depot et placement, which holds a 34.7% stake in Bombardier Transport.

Last month, Alstom was surprised by the poor financial results of Bombardier Transportation in the second quarter.

The French company saw “negative and unplanned developments” in relation to the information provided by Bombardier at the start of the year.

During the three-month period ended June 30, Bombardier Transportation incurred an operating loss of US $ 377 million due to cost overruns of US $ 435 million related primarily to projects in the UK and Germany.

Bombardier CEO Eric Martel described the situation as “totally unacceptable”.

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