Bombardier Still Faces Business-Jet Cycle Challenges After Sale
- Sale of rail unit will help reduce debt, analysts say
- Regulatory scrutiny poses a potential hurdle to deal
Photographer: Bridget Bennett/Bloomberg
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Bombardier Inc. selling its rail unit to Alstom SA drew mostly positive reaction Tuesday from analysts, who said it will help Bombardier address its hefty debt, while also focusing its efforts on business jets, where it has competitive offerings across a range of products.
Analysts also pointed to the cyclicality and competitiveness of the private-jet market, factors that Bombardier will no longer be able to offset with other business units. Another potential hurdle is regulatory scrutiny, after Alstom’s attempted tie-up with Siemens AG was scuttled by European regulators a year ago.