French TGV maker Alstom in talks to buy Bombardier rail unit

French train maker Alstom has announced an offer to buy the train business of Bombardier, the Canadian aerospace and engineering company

PARIS -- French train maker Alstom has announced an multibillion-euro offer to buy the rail business of Canadian engineering firm Bombardier, as it tries to bulk up to compete with big rivals, particularly from China.

Alstom, which makes the French TGV high-speed trains, said in a statement Monday it has signed an agreement with a view to the acquisition of 100% of Bombardier Transportation. The price will be 5.8 to 6.2 billion euros ($6.3-6.7 billion), which will be paid via a mix of cash and new Alstom shares.

Alstom CEO Henri Poupart-Lafarge said: “I’m very proud to announce the acquisition of Bombardier Transportation, which is a unique opportunity to strengthen our global position on the booming mobility market."

The move would give more heft to Alstom after its bid to merge with Germany's Siemens was blocked by European Union regulators worried that it would make it a dominant presence in the region.

The decision to nix that deal was criticized by some European governments who want to create large European companies in various sectors that are capable of competing with state-backed companies in China and as well as U.S. multinationals.

French Finance minister Bruno Le Maire welcomed the offer as “excellent news for France, Europe and Canada.”

He said he will meet with the EU's executive vice president, Margrethe Vestager, Tuesday about the proposed acquisition, which will need to be approved by the bloc's competition authorities.

Buying Bombardier Transportation would help Alstom compete with China's CRRC, which has been growing its business outside of its home country.

Bombardier Transportation is focused on commuter trains and last year made almost $8.5 billion in sales.

Shares in Bombardier have dropped some 70% since a peak in 2018, while Alstom's have risen 30% in the same period.