Alstom SA and Bombardier Inc. won a joint contract valued at 3.3 billion euros ($3.6 billion) to supply double-decker cars to the Belgian national railway through 2021.
The first 445 wagons are slated for delivery starting in 2018, the trainmakers said in a joint statement. Montreal-based Bombardier’s share of the contract is worth 2.1 billion euros, with the rest going to the French manufacturer, they said.
Alstom, based in the Paris suburb of Levallois-Perret, completed the sale of its energy operations to General Electric Co. last month to focus on supplying the railway industry. Bombardier, which also builds planes, decided in November to sell a 30 percent stake in its trainmaking unit rather than hold an initial public offering in the business. The company will use cash from that deal to fund development of the C Series airliner, a project that’s behind schedule.
“The rail market is a dynamic market with a strong potential” tied to urbanization and mobility, Alstom Chief Executive Officer Patrick Kron told shareholders Friday at a meeting to approve a stock buyback.
Bombardier jumped as much as 8.6 percent, the steepest intraday gain since Nov. 25, and was trading up 8.6 percent at C$1.27 as of 9:33 a.m. in Toronto. Alstom rose as much as 1.6 percent and was trading up 1.4 percent at 27.61 euros in Paris, reversing a decline earlier in the day.
The French and Canadian manufacturers already cooperate on trains for the Paris region’s commuter network and Montreal’s subway system. Bombardier’s plant in Bruges, Belgium, will provide 65 steering cars and 290 trailer cars under the new contract, while Alstom’s factories in Valenciennes, France, and Charleroi, Belgium, will build 90 motorized cab cars and the trains’ control technology.
(Updates with CEO’s comment in fourth paragraph, contract terms in final paragraph.)