Quebec’s provincial pension fund agreed to buy a 30-per-cent stake in Bombardier Inc.’s rail business for $1.5 billion, with the Canadian manufacturer shelving a public stock sale in the unit following a strategic review.
Caisse de dépôt et placement du Québec will acquire convertible shares in a new holding company that the Montreal-based train and plane producer is creating out of its Bombardier Transportation division, the companies said in a statement Thursday. The transaction values the Berlin-based unit at $5 billion.
Bombardier was considering an initial public offering among options for the trainmaking unit to help shore up finances amid delays in the aircraft division’s introduction of its CSeries jetliner. Quebec Premier Philippe Couillard pledged the provincial government’s support for the company in late September. The pension fund will have the right to trigger an IPO in the new entity, BT Holdco, after five years, and a stock sale is also possible should control of Bombardier change, the companies said Thursday.
“This investment by CDPQ, which has a long history as one of our major investors, is a testimonial to the growth potential of the rail industry and to Bombardier’s leadership in seizing the opportunities this market offers on a global scale,” Bombardier Chief Executive Officer Alain Bellemare said in the statement.