Bombardier has announced its intention to sell its rail business to Alstom.
The move would enable Bombardier to reduce its huge debt load.
If it manages to agree and conclude a sale of the rail business, it will enable Bombardier to strategically and operationally concentrate on its remaining asset – the Bombardier aviation business.
Bombardier believes that it should achieve a sale price around $6 billion for the division. It is understood that a Memorandum of Understanding has been signed between Bombardier Inc., Caisse de dépôt et placement du Québec (“CDPQ”) and Alstom in view of the acquisition of Bombardier Transportation.
Across the OEM’s in the jet aircraft market the majority are diversified businesses that sell products and services in additional markets to the aviation sector.
By going all chips down into one market, Bombardier is banking on a ever lasting need for its jet aircraft – in a market that is often cyclical aligned with global economic conditions.
Gulfstream Business Jets as an example are owned by parent company General Dynamics corp a well-diversified and profitable corporation; the same is true for Dassault Business Jets through Dassault parent company.
The Bombardier business jet offering is popular and well received globally with a range of jets across the size and capability spectrum, coupled with a healthy sales pipeline.
The company can count companies such as the world famous NetJets as its client which provided Bombardier with part of its largest business jet order in history.
What the forthcoming year and decade holds for the business jet community remains to be seen, the hope is for continued demand for new jets and a healthy uptake of pre-owned.