DaimlerChrysler to Sell Rail Systems Unit

Germany’s DaimlerChrysler has agreed to sell its struggling rail systems unit, Adtranz, to Montreal-based Bombardier Inc. in a $725-million cash deal that would propel the Canadian plane and train maker into the top tier of the passenger rail equipment industry, the companies said. The price of the deal is expected to be cut by a sale of Adtranz’s fixed installations and signaling business, Bombardier said. The Adtranz acquisition would more than double Bombardier’s rail equipment business, jumping to $5.6 billion in annual sales from $2.9 billion, and making it the company’s biggest source of revenue. Bombardier is already the world’s third-largest civil aircraft maker, behind Boeing Co. and Airbus Industrie. DaimlerChrysler said selling the Adtranz unit fits its strategy of shedding non-automobile units and should improve its earnings. The sale is subject to approval by regulators and DaimlerChrysler’s supervisory board. DaimlerChrysler’s shares rose 13 cents to close at $52.13 on the New York Stock Exchange.