Latest Rail News

01.05.15

Chinese firms ‘exploring purchase of Bombardier rail arm’, reports say

The biggest two train companies in China have been in discussions about a possible purchase of a controlling stake in Bombardier’s railway operation.

China’s CNR Corp and state-owned CSR Corp are currently in the process of merging to create the world's biggest railway company, but are already exploring a stake purchase of the Bombardier unit for when the merger completes, according to Reuters.

The business news website was told by sources it would complement China's plan to sell its high-speed rail technology abroad.

Discussions will not be able to move forward until after the Chinese train-makers complete a planned $26bn merger next month.

Rumours about the division’s future have been swirling since February, when Bombardier said it was evaluating “industry consolidation” opportunities. At the time it was hinted that any consolidation would likely involve the company’s train-making unit, as the aerospace business continues to struggle with huge cost overruns.

Reuters also suggests the Canadian company is working with banks on strategic options, which also include a possible initial public offering either in Germany or Britain. Bankers value a possible deal at up to $5bn.

Bombardier spokeswoman Isabelle Rondeau said that Bombardier Transportation is not for sale, but added: “We will not comment on any public speculation as to what may or may not happen as a result of this evaluation.”

Executives at CSR and CNR have also both denied knowledge of the matter.

(Image source: Chris J Dixon)

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Comments

Lutz   02/05/2015 at 11:31

Discussions about a possible merger of Bombardier's global rail operations with Alstom were going on before Christmas 2014. Cutting to the crux; there will be another rationalisation of manufactures as the industry consolidates globally.

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