Canadian train transport company Bombardier Transportation is disposing of its 3.1% interest in French rolling stock manufacturer Alstom in a $608.4m (€506.2m) transaction.

Bombardier is selling the stake at €44.00 a share through a book-building process to institutional investors.

The deal involves the sale of 11.5 million shares, which were obtained by Bombardier as part of the divestiture of its rail business to Alstom.

Bombardier said that after the settlement of the offering on 7 May, it will have no stake in Alstom.

Bombardier and Caisse de dépôt et placement du Québec (CDPQ) signed a memorandum of understanding (MoU) to sell Bombardier Transportation to Alstom in February 2020.

The aim of the deal was to enable Bombardier to focus on business aviation and reduce its debt.

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By GlobalData

In September 2020, Alstom signed the sale and purchase agreement to acquire Bombardier Transportation with revised price terms, which reduced the price range by €300m.

The updated terms revised the price range for the acquisition of all Bombardier Transportation shares from €5.5bn to €5.9bn compared with the initially announced range between €5.8bn and €6.2bn.

The revised offer was reportedly the result of Bombardier’s poor quarterly performance and the Covid-19 pandemic.

Canadian pension fund management company CDPQ became the largest shareholder of Alstom with around 18% of its share capital after the sale of the rail business, which was completed in January 2021 for €5.5bn.