Knorr-Bremse Signaling Deal Completed
Knorr-Bremse, parent company of New York Air Brake, announced Sept. 2 the completion of the deal to acquire Alstom’s conventional signaling business in North America. According to Alstom, the purchase price was approximately $690 million.
Alstom signed a binding agreement to sell the business to Knorr-Bremse on April 19. Completion marks the final stage of Alstom’s $2.2 billion (€2 billion) deleveraging plan announced in November 2023 to reinforce its balance sheet and maintain an investment-grade rating.
Knorr-Bremse has acquired the conventional product portfolio of Alstom Signaling North America, as well as sales, service, and manufacturing operations located primarily in the United States and Canada.
The 800 staff concerned now become employees of KB Signaling, a standalone business unit within Knorr-Bremse’s North American rail activity, operating from six major sites including two production plants and other engineering facilities in the United States.
Knorr-Bremse says that Alstom Signaling North America recorded $331 million (€300 million) of revenue in the financial year to March 31, 2024, and an Ebit margin of around 16%.
Long-established as a supplier of braking and other systems for rolling stock, the acquisition marks Knorr-Bremse’s entry into what it describes as the “attractive” North American control, command and signaling (CCS) market, which it intends to “enhance and globalize” by developing new digital solutions.
Entering the signaling market marks a major step toward Knorr-Bremse achieving the strategic objectives of its Boost 2026 program, under which it is focusing on “cutting-edge, highly-profitable product areas that match the deep understanding of safety-critical, mission-critical solutions embedded in Knorr-Bremse’s DNA.”
The product portfolio that KB Signaling will now be supplying mainly comprises wayside train and level crossing control systems, relays and track products, and onboard train control, train supervision, and wayside intelligence. The portfolio is Buy America-compliant, meeting the domestic product requirements of contracts funded by the U.S. government.
In the medium term, Knorr-Bremse aims to establish itself as an international Tier 1 systems and platform partner for rolling stock manufacturers, operators, and infrastructure and signaling technology suppliers. The global CCS market is potentially worth up to $22.1 billion (€20 billion), according to Knorr-Bremse.
The company’s existing activities in the European signaling market will be folded into KB Signaling. Meanwhile, Alstom will continue to supply the North American signaling market with CBTC and ETCS.
“Our new rail signaling technology business in North America is both market-leading and high-margin, and thus an excellent fit with our Boost 2026 group strategy which is focused on long-term profitability and sustainable growth,” Knorr Bremse CEO Marc Llistosella said.
“Entering the signaling market in North America is a logical step on our way to becoming a systems and platform partner supplying safety-critical, mission-critical solutions to the rail industry,” said Dr. Nicolas Lange, the Knorr-Bremse executive board member responsible for the Rail division. “The signaling business is suitably profitable, enjoys a high share of the service segment as a long-term revenue driver, and offers major opportunities for further development.”
