It was recently reported that Russian Railways intends to exchange a blocking package in Transmashholding for a blocking package in Bombardier Transportation before next summer. Then, in the course of three years, its share in the Canadian company will grow to 50% practically uniting the two heavy equipment makers into a single company with USD 9 billion to USD 10 billion in annual sales.

As per report Russian Railways is now buying a blocking package in the Dutch company Breakers Investments, which owns Transmashholding for USD 370 million. Analysts note that the two companies are not equal in value. A blocking package in Bombardier, which had receipts of USD 6.6 billion in 2006 and EBITDA of USD 364 million should cost USD 1.4 million to USD 1.8 million.

Transmashholding has been estimated to be worth USD 2.38 billion to USD 2.9 billion making a blocking package in it worth USD 596 million to USD 725 million. Russian Railways received a 35% discount when it bought the Transmashholding stock. Russian Railways can thus expect to pay around USD 1.2 billion in the deal as well.

Russian Railways may receive a certain discount from the Canadian company in exchange for entry into the Russian market. That market is quite attractive, with USD 100 billion to USD 130 billion in planned spending on new rolling stock through 2030. The deal still needs the approval of the Ministry of Transportation, the head of which, Mr Igor Levitin sits on the Russian Railways board of directors.