Faiveley Transport, which employs 5700 people in 24 countries, reported annual sales of around $US 1.2bn in 2014-15. The company manufactures and supplies products ranging from braking systems and couplers, passenger access systems and platform screen doors, air conditioning, power collectors and converters, and passenger information systems.

Faiveley Transport's headquarters in Gennevilliers, France, will become Wabtec's global transit headquarters under the Faiveley Transport brand name and the transaction recombines former SAB Wabco rail divisions creating a company with total revenues of $US 4.5bn.

"Faiveley Transport brings to Wabtec many complementary products, a strong presence in the European and Asian transit industries and solid relationships with blue-chip, global customers," says Mr Raymond T Betler, Wabtec president and CEO.

The transaction, which is subject to various conditions, including labour group consultations and other regulatory requirements, is structured in three steps:

• Wabtec has made an irrevocable offer to the owners of approximately 51% of Faiveley Transport's shares for a purchase price of €100 per share, payable 25% in cash and 75% in Wabtec preferred stock

• upon completion of the labour consultations, Wabtec expects that the 51% of shareholders will enter into a definitive share purchase agreement and FaiveleyTransport will enter into a transaction agreement with Wabtec, and

• upon completing the share purchase, Wabtec will commence a tender offer for the remaining publically-traded Faiveley Transport shares with public share holders having the option to receive €100 per share or Wabtec preferred stock. Wabtec intends to delist Faiveley Transport from Euronext following this tender offer if minority interests represent less than 5%.

Wabtec intends to fund the cash portion of the transaction with cash-on-hand, existing credit facilities, and potentially other debt financing. It expects to realise at least €40m in annual pre-tax synergies from the takeover, and the transaction is expected to be accretive to Wabtec's earning per diluted share in 2016.

Once the transaction is completed, Mr Stéphane Rambaud-Measson, Faiveley Transport's current chairman of the management board and CEO, will join Wabtec as president and CEO of Wabtec's Faiveley Transport group and as Wabtec corporate executive vice-president, reporting to Betler. The Faiveley family would pursue its long term strategic involvement in the railway industry both as a prominent shareholder of Wabtec and as a representative on Wabtec's Board of Directors.

"The combination of our operations with Wabtec would be an excellent strategic move for Faiveley Transport," Rambaud-Measson said. "We complement each other remarkably, both in terms of product portfolios and geographies. This transaction would enable us to pursue our ambition to become a global leader in railway equipment and services for the passenger transit market."