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April 23, 2021

Thales reportedly plans to divest rail signalling business

French defence and aerospace group Thales is reportedly planning to put up its rail signalling business for sale for $1.8bn or more.

French defence and aerospace group Thales is reportedly planning to put up its rail signalling business for sale for $1.8bn or more.

Reuters reported, citing people familiar with the development, that Thales plans to use the proceeds from the sale to boost capital following the Covid-19 crisis, which hit its sales and profits in 2020.

The firm, which is partially owned by the French state, is working with adviser Lazard on the sale and is likely to soon send out information packages to potential buyers, who may include Alstom, Hitachi Rail, Stadler Rail, Spain’s CAF and private equity groups.

Sources told Reuters that Siemens may not bid for this business due to antitrust issues while Alstom may also face the same.

Earlier this year, Alstom had completed the acquisition of Bombardier’s rail business.

Thales’ signalling business forms part of its transport division.

It supplies fare collection systems and cybersecurity solutions for railway infrastructure.

In 2020, its orders declined by 6% to $1.93bn (1.6bn) as customers postponed rail projects due to tepid demand caused by the Covid-19 pandemic.

In February, Thales was selected to supply 82 SelTrac vehicle onboard controllers (VOCs) for 41 new trains as part of TransLink’s SkyTrain fleet expansion in Vancouver, Canada.

This technology has the ability to control propulsion, the direction of travel, door operations and braking, as well as implement speed limits and report identified inaccuracies.

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