Alstom has completed the sale of its North American signalling business to Knorr-Bremse AG, following the binding agreement signed on 19 April 2024 at a price purchase of USD 690 million.
This divestiture was part of the comprehensive company action plan that Alstom announced in November 2023, aiming at reinforcing its balance sheet. Alstom has delivered all three components of that plan, and it results in the stabilisation of its Investment Grade rating.
Alstom says it will continue to serve the North American signalling market on different segments, notably with CBTC and ETCS solutions.
For Knorr-Bremse, the acquisition is a strategic progress toward long-term profitability and sustainable growth. It will enable Knorr-Bremse to enter North America’s attractive market for signalling technologies (control, command and signalling – CCS), which the company intends to enhance and globalise by developing new and digital solutions.
“Our entry into the North American signalling market is an outstanding example of Knorr-Bremse’s drive to create even greater value as we further develop our portfolio by entering new, highly promising areas of business. The acquisition also contributes to another strategic objective: to further enhance the Rail side of Knorr-Bremse’s business activities,” Marc Llistosella, CEO of Knorr-Bremse AG said.
With this transaction, Knorr-Bremse has acquired the conventional signalling product portfolio, sales, service, and manufacturing operations of Alstom Signaling North America, primarily in the USA and Canada. The nearly 800 team members will become employees of KB Signaling, a standalone business under the North American rail organisation. With two production plants and numerous engineering facilities in the USA, the new business unit operates in six major locations. Over the last financial year ending March 31, 2024, Alstom Signaling North America generated around EUR 300 million in revenues with an EBIT margin of around 16%.
Five broad categories make up the new KB Signaling unit’s North American conventional CCS platform and solutions and include wayside train and crossing control, and relays and track products, solutions that make up the vast majority of the portfolio, in addition to onboard train control, train supervision, as well as a robust set of Wayside Intelligence solutions, including data analytics. With coast-to-coast coverage, the portfolio is Buy America compliant and supported by solid R&D.
On this basis, the company’s new signalling business unit is already well positioned in the North American signalling market and ready to further expand its leadership by offering innovative CCS solutions. In the medium term, Knorr-Bremse aims to establish itself as an international Tier 1 systems and platform partner for train manufacturers, rail operators, and infrastructure and signaling technology firms. The company’s existing business activities in the European signalling market will be folded into the signalling business unit.
Knorr-Bremse sees business development opportunities in the further development of the company’s product portfolio, the creation of new solutions for smart interaction between trackside signalling technologies and onboard (braking) technologies, and new strategic acquisitions. Knorr-Bremse aims to help raise levels of safety, availability, reliability and operating efficiency in passenger and freight rail transport by offering scalable solutions for the North American market, but also for the key European and Asian markets. Knorr-Bremse estimates that for the Rail division, the potential size of the global market for CCS rail signaling technology may be as much as EUR 20 billion.
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