China’s top two trainmakers said Tuesday they will merge, creating a US$26 billion company able to compete with the likes of Germany’s Siemens and Canada’s Bombardier for global rail deals, Reuters reported.
State-run media reported in October that state-owned firms China CNR (06199.HK) and CSR Corp. (01766.HK) were in merger talks.
A merger of the firms — which have so far competed against each other to sell trains abroad — will help solidify China’s campaign to sell its high-speed rail technology overseas.
Under the deal, CSR will issue 1.1 share for each CNR share to CNR’s shareholders.
CNR and CSR, which are already the world’s largest train makers thanks to robust domestic sales, halted trading on Oct. 27 and issued statements saying they would resolve “major issues” soon.
CNR shares closed at HK$7.66 and CSR shares at HK$7.89 on Oct. 24, giving them a combined market value of HK$202 billion (US$26 billion). Trading will resume Dec. 31.
Both firms have separately indicated their early interest in supplying trains to California’s proposed US$68 billion high-speed network.
In October, CNR won a US$567 million contract to supply trains to Boston, the first deal for a Chinese railway equipment maker in the United States.
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