Russian Railways Makes Deal in Canada
Russian Railways intends to exchange a blocking package in Transmashholding for a blocking package in Bombardier Transportation before next summer. Then, in the course of three years, its share in the Canadian company will grow to 50 percent, practically uniting the two heavy equipment makers into a single company with $9-10 billion in annual sales. Bombardier Transportation is a division of the Bombardier Inc., which is 80-percent owned by the Bombardier family.
Sources say that Russian Railways is now buying a blocking package in the Dutch company Breakers Investments, which owns Transmashholding, for $370 million. Analysts note that the two companies are not equal in value. A blocking package in Bombardier, which had receipts of $6.6 billion in 2006 and EBITDA of $364 million, should cost $1.4-1.8 million. Transmashholding has been estimated to be worth $2.38-2.9 billion, making a blocking package in it worth $596-725 million. Russian Railways received a 35-percent discount when it bought the Transmashholding stock. Russian Railways can thus expect to pay around $1.2 billion in the deal as well.
Russian Railways may receive a certain discount from the Canadian company in exchange for entry into the Russian market. That market is quite attractive, with $100-130 billion in planned spending on new rolling stock through 2030. The deal still needs the approval of the Ministry of Transportation, the head of which, Igor Levitin, sits on the Russian Railways board of directors.
www.kommersant.com
All the Article in Russian as of Dec. 03, 2007
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