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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