Wabtec to buy Faiveley Transport

Wabtec Corp., with railroad electronics operations in northeast Cedar Rapids, plans to acquire Faiveley Transport of France for $1.8 billion, including assumed debt.

The merger would create one of the world's largest public rail equipment companies, with revenues of about $4.5 billion and a presence in all major freight rail and passenger transit locations worldwide.

Wilmerding, Pa.-based Wabtec has made an irrevocable offer to the owners of approximately 51 percent of Faiveley Transport's shares for a purchase price of about $100 per share, payable 25 percent in cash and 75 percent in Wabtec preferred stock. Shareholders owning 51 percent of Faiveley Transport have entered into exclusive discussions with Wabtec.

After completing required labor union discussions, Wabtec expects the 51 percent of shareholders will enter into a definitive share purchase agreement and Faiveley Transport will enter into a transaction agreement with Wabtec.

After it completes the share purchase, Wabtec will launch a tender offer for the remaining publicly-traded Faiveley Transport shares. The public shareholders will have the option to receive either $100 per share or Wabtec preferred stock.

Wabtec, in a news release announcing the proposed purchase of Faiveley Transport, said it will fund the cash portion of the transaction with cash on hand, existing credit facilities and potentially other debt financing.

Gennevilliers, France-based Faiveley Transport is a provider of integrated systems and services for the railway industry. The company has more than 5,700 employees in 24 countries and generated record sales of about $1.2 billion in its most recent fiscal year.

Wabtec has more than 13,000 employees in more than 20 countries and annual sales of about $3.3 billion. The company manufactures a range of products for locomotives, freight cars and passenger transit vehicles, and new switcher and commuter locomotives.