Alstom shares fall after Alstom's $6.7bn Bombardier rail deal

• Alstom shares were down 2pc in early session trading.
• The agreement between Alstom and Bombardier would unite companies with an estimated $17 billion in combined revenue.
• French trade unions issued a statement late on Monday to warn that the deal between Alstom and Bombardier must not result in major job losses in France.

PARIS: Alstom shares fell on Tuesday after Alstom agreed to buy the rail division of Canada's Bombardier for up to 6.2 billion euros ($6.7 billion), in a deal which could still face tough scrutiny from regulators and unions.

Alstom shares were down 2pc in early session trading.

"We believe shares will now remain range bound amid the capital increase and uncertainty during a lengthy anti-trust process," wrote analysts at JP Morgan, which cut its rating on Alstom to "neutral" from "overweight".

The agreement between Alstom and Bombardier would unite companies with an estimated $17 billion in combined revenue.

A combination with Bombardier would give Alstom a share of between 40pc and 60pc of the European regional train market, according to estimates cited by union sources in France, well above Siemens at 10pc to 20pc.

But some analysts have said there could be less opposition to a deal this time as Alstom and Bombardier have a lower combined European market share in high-speed rail and signalling.

French trade unions issued a statement late on Monday to warn that the deal between Alstom and Bombardier must not result in major job losses in France.

Alstom boss Poupart-Lafarge himself said on Monday the acquisition would not affect jobs and that he was confident in achieving antitrust approval.