Bombardier President and CEO Alain Bellemare attends the company's annual general meeting in Montreal on May 2, 2019. THE CANADIAN PRESS/Graham HughesMONTREAL -- Bombardier Inc. saw shares drop as much as 10.3 per cent Tuesday after announcing the sale of its rail business to French train giant Alstom SA.
If approved by regulators, the US$8.2-billion transaction will help Bombardier slash its debt by half, capping a five-year turnaround plan that has seen the company shed numerous assets, including its commercial airplane division. While private jets often yield higher margins, the luxury industry is more cyclical than rail, and the analysts say equity markets perceive business jets as "facing structural challenges" that are "unappealing from a growth perspective."The acquisition by Alstom -- whose stock dropped more than three per cent Tuesday -- is expected to come under intense scrutiny from antitrust regulators in the European Union.