IT LOOKS as if Jean-Yves Leblanc may be going into the signalling business. Outlining progress with the takeover of Adtranz (RG 9.00 p601), Bombardier Transportation’s President & Chief Operating Officer admitted on September 12 that the bids for Adtranz Signal had been ’not interesting’. GE Harris and Harmon are too busy consummating their own merger, whilst Alcatel and Invensys confirmed that they had withdrawn their offers after due diligence.
No such problems hindered the disposal of the Adtranz Fixed Installations unit, which specialises in electrification. This was sold to Britain’s Balfour Beatty Group for £94m on September 20. Ironically for DaimlerChrysler, among the benefits of the deal highlighted by BB Chief Executive Mike Welton was access to ’substantial German tax losses’.
Leblanc feels that Adtranz will fit well with the existing Bombardier product range, helping to create a ’fully-fledged integrated player to compete across the entire product range.’ Responding to suggestions that DaimlerChrysler was selling cheap, he retorted that US$725m was ’a very good price for us’.
Adtranz and Bombardier are continuing to operate as independent businesses pending regulatory approval. Leblanc expects the European Commission to prove the toughest hurdle; its ruling may not be announced until early next year. Meanwhile, he is in discussions with senior Adtranz managers over the future shape of the business. The merged company would have 42 plants in 23 countries, but Leblanc refused to speculate on rationalisation pending a strategic review. ’After Day One ... we will look at what needs to be done in all areas.’
Bombardier forecast last year that it would increase earnings before tax from 5% to 8% of turnover within four years. With Adtranz set to break even this year and move into profit in 2001, Leblanc hopes to know this month whether the 8% target can still be attained.
