Alstom shares fall after its $6.7b Bombardier rail deal
PARIS, Feb 18: Alstom shares fell on Tuesday after the French firm agreed to buy the rail division of Canada's Bombardier for up to 6.2 billion euros ($6.7 billion), in a deal likely to be scrutinized by regulators and unions.
Alstom shares were down 4.4per cent in early session trading.
"We believe shares will now remain range bound amid the capital increase and uncertainty during a lengthy anti-trust process," wrote analysts at JP Morgan, which cut its rating on Alstom to "neutral" from "overweight".
The agreement between Alstom and Bombardier would unite companies with an estimated $17 billion in combined revenue.
A combination with Bombardier would give Alstom a share of between 40per cent and 60per cent of the European regional train market, according to estimates cited by union sources in France, well above Siemens at 10per cent to 20per cent.
Some analysts have said there could be less opposition to a deal this time as Alstom and Bombardier have a lower combined European market share in high-speed rail and signaling. -Reuters