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Bombardier in talks to sell train-making division to French multinational Alstom

Bombardier Inc. is negotiating a preliminary deal to sell its transportation division to Paris-based Alstom SA.

The deal, first reported in the Wall Street Journal on Sunday, could yield $7 billion US for the Quebec-based firm.

The newspaper also said Quebec's pension fund manager, the Caisse de dépôt et placement, will sell its 32.5 per cent stake in Bombardier's train unit to Alstom and buy a minority stake in the combined train company.

Alstom confirmed Monday it is in talks with Bombardier, but said the deal had not been finalized.

"Discussions are ongoing. No final decision has been made," the French company said in a short statement. "Alstom will inform the public of any material developments in this respect."

Bombardier has around $7 billion of debt coming due by 2025 and has been selling assets in recent years to stabilize its financial position.

Last week, the company announced the sale of its remaining commercial aviation project, a minority position in Airbus's A220.

If the sale of its transportation division goes ahead, it would leave Bombardier with only its business-jet unit.

Bombardier Transportation employs around 1,000 people in Quebec, mainly at a factory in La Pocatière, and 3,000 people in the rest of Canada. It has plants in Thunder Bay and Kingston, and offices in Vancouver and Mississauga.

A spokesperson for Quebec's economy minister, Pierre Fitzgibbon, said he would respond "when it's official."

Alstom, which makes France's high-speed TGV trains, wants to build a bigger rail unit to compete with Chinese rivals that are increasingly seeking contracts outside China.

Its bid last year to merge with Germany's Siemens was blocked by European Union regulators worried that it would make it a dominant presence in the region.