Knorr-Bremse Expands Rail Signaling

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Knorr-Bremse AG, the global leader in braking systems and rail and commercial vehicle technologies, has announced the acquisition of Alstom Signaling North America’s conventional railway signaling business. This strategic move allows Knorr-Bremse to make its debut in the lucrative CCS (Control, Command and Signaling) segment and strengthen its presence in North America, reinforcing its position in the rail industry. The transaction, poised to finalize in summer 2024, marks a significant enhancement in Knorr-Bremse’s technological capabilities and market coverage.

Key Highlights

• Strengthened Market Position: With this acquisition, Knorr-Bremse is set to become a major player in the North American CCS market.
• Enhanced Profitability: The takeover is expected to immediately benefit Knorr-Bremse’s profitability metrics.
• Expansion in CCS: Entry into the CCS segment significantly enlarges the company’s potential market, estimated to be worth about EUR 20 billion.
• Strategic Fit: The acquisition aligns with the “BOOST 2026” strategy, focusing on growth and technological advancement.

Marc Llistosella, CEO of Knorr-Bremse AG, highlighted the strategic nature of the acquisition, saying, “This acquisition is good for Knorr-Bremse and will further drive our profitable growth. We are not only expanding our highly profitable rail business. We will also become one of the market leaders in North America in the CCS – Control, Command and Signaling rail segment. The transaction follows an impressive industrial logic and fits very well with our development and growth path, as we announced in our strategy program ‘BOOST 2026’. At Knorr-Bremse, we implement what we have planned. And we look forward to welcoming our new colleagues to the Knorr-Bremse team soon.”

Dr. Nicolas Lange, Member of the Board of Directors of Knorr-Bremse AG and responsible for the Rail Vehicle Systems division, elaborated on the integration’s benefits: “For Knorr-Bremse, the acquisition of Alstom Signaling North America represents a successful entry into the CCS segment. The CCS market worldwide is worth around EUR 20 billion and is therefore a highly attractive rail segment. For us as an international system supplier, the transaction is a significant step forward in the electronics and digitalization of the rail infrastructure. Brakes and signaling technology play a key role in determining safety and capacity in rail transport. The CCS segment therefore fits perfectly into the DNA of the Knorr-Bremse Rail Division.”

Financial Aspects of the Deal: The acquisition, valued at around EUR 630 million, includes additional investments expected to boost highly profitable project business and support sales growth in the medium term. Alstom Signaling North America posted revenues of approximately EUR 300 million with an EBIT margin of 16% in the last fiscal year. The financing will utilize existing liquidity and debt instruments, maintaining the credit stability of Knorr-Bremse.

The acquisition not only solidifies the company’s market leadership but also ensures sustained growth and innovation in the dynamic rail sector, underscoring its commitment to enhancing safety and operational efficiency through advanced technology solutions.