Knorr-Bremse acquires rail signaling technology business of Alstom to boost market presence
Knorr-Bremse AG, the global leader in braking systems and other rail and commercial vehicle systems, today announced a significant acquisition of the conventional rail signalling technology business from Alstom Signaling North America. This move, valued at approximately EUR 630 million, marks Knorr-Bremse’s ambitious entry into the control, command, and signalling (CCS) sector of the rail market—a segment worth around €20 billion globally. The transaction is poised to close in the summer of 2024, integrating a profitable and technologically advanced operation into Knorr-Bremse’s portfolio.
Financial and Operational Impact:
The acquisition is expected to be immediately accretive to Knorr-Bremse, enhancing its earnings from the outset. Alstom Signaling North America, a leading player in the North American CCS market, reported revenues of EUR 300 million with an impressive EBIT margin of 16% for the fiscal year ending March 31, 2024. The purchase includes potential additional earnings from highly profitable project business, promising substantial revenue growth in the medium term. Financing for this acquisition will be managed through available liquidity and debt, without impacting Knorr-Bremse’s credit rating.
CEO’s Vision and Strategic Fit:
Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG, highlighted the acquisition’s alignment with the company’s strategic growth plans, including the ‘BOOST 2026’ strategy program. “This acquisition is good for Knorr-Bremse and will drive our profitable growth further,” said Llistosella. “It not only builds on our highly profitable rail business but also positions us as one of the market leaders in the US CCS segment.”
Expansion into CCS and Digitalization:
Dr. Nicolas Lange, member of the Knorr-Bremse AG Executive Board responsible for the Rail Vehicle Systems division, explained that the acquisition signifies a pivotal expansion into the CCS segment, enhancing the company’s capabilities in digitalization and electronics in rail infrastructure. This strategic move is expected to significantly influence rail transportation safety and capacity, fitting seamlessly into Knorr-Bremse’s core operational focus.
Market Opportunities and Future Outlook:
The acquisition enables Knorr-Bremse to offer a comprehensive CCS technology platform to operators and system providers in North America under one roof, strengthening its position in the digitalization business. Access to a vast amount of infrastructure data will also allow Knorr-Bremse to offer enhanced data services or “software as a service” to its clients, leveraging the large installed base of Alstom Signaling North America, particularly in the freight segment.
The acquisition of Alstom’s rail signaling technology by Knorr-Bremse is a strategic expansion that not only strengthens its product offerings but also significantly boosts its competitiveness in the North American market and beyond. This move is a clear indicator of Knorr-Bremse’s commitment to leading innovation in the rail sector, particularly in the burgeoning field of rail control and signaling systems.