EU rail giants on brink of merger: report

FRANCE’S Alstom and Germany’s Siemens have a deal ready to sign that would merge their rail businesses in the face of Chinese competition, German business daily Handelsblatt reported yesterday.

Alstom, which makes the French TGV high-speed train, confirmed on Friday that it was talking to Siemens about a possible railway tie-up, but said no decision had been taken.

Handelsblatt however, citing “insiders” familiar with the deal, said yesterday the two groups have overcome past reservations about a joint venture with a “balanced agreement acceptable to both sides”.

But Siemens has also been courting Canadian firm Bombardier, whose European operations are based in Berlin, and the two companies have their own detailed plan for two joint ventures covering rolling stock and signalling.

The Munich-based group’s supervisory board is set to meet today to discuss the two options, Handelsblatt reported, while Alstom’s executive board will also meet.

Both companies declined to comment on the report when contacted, but a source familiar with the talks backed it up, adding that the firms would make a statement on their plans once the boards have met.

Siemens and Alstom discussed a rail tie-up in 2014-15, but the French firm decided in the end to partner with General Electric, selling its energy division for € 9.5 billion ($11.3 billion) to become a rail specialist.

A joint venture would bring together the engineering giants that make their countries’ flagship high-speed trains, including the world-famous TGV.