Bombardier Inc. says it has reached a US$8.2-billion deal to sell its rail business to French train giant Alstom SA.
The agreement narrows Bombardier's focus as the plane-and-train maker commits itself solely to business jets while casting off its largest division in part to help pay down US$9.3 billion in debt.
The acquisition also signals an effort by Alstom to scale up amid rising competition from China's state-owned CRRC, the world's largest train maker.
Bombardier says the transaction will see Quebec pension giant Caisse de depot et placement, which owns a 32.5 per cent stake in Bombardier's train division, become Alstom's largest shareholder.
Bombardier says net proceeds from the deal will be between US$4.2 billion and US$4.5 billion after deducting the Caisse's equity position of roughly US$2.2 billion, as well as adjustments for debts and other liabilities.
The deal is expected to close in the first half of 2021 if it can move through regulatory hurdles.