China rail firms plan to merge to be the biggestStaff writer ▼ | October 29, 2014
China’s top trainmakers, China CNR and CSR Corp, are in merger talks to create a giant able to compete globally with the likes of Siemens and Bombardier, state media reported.
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The official China Securities Journal, citing unidentified sources, said the firms had set up working groups to discuss the integration, and that investment bank China International Capital Corp had been appointed to oversee the reorganisation.
“The heads of CNR and CSR are in agreement on the companies’ integration,” the newspaper quoted an industry source as saying. “As the State Council is in charge of this, it can be done at great speed and at the moment the biggest concern is related to their projects and personnel changes.”
CNR and CSR halted trading yesterday and subsequently issued statements saying they would resolve “major issues” as soon as possible. Trading would resume within five working days, they added.
Last month, CNR and CSR dismissed a report by financial news magazine Caixin that the government was looking to merge the firms to create a giant that can better compete with foreign rivals such as Germany’s Siemens and Canada’s Bombardier.
A merged CNR-CSR would have combined annual revenue of about 200 billion yuan (RM106.7 billion) based on 2013 company data, compared to Siemens’ €75.9 billion (RM315.42 billion) revenue last year and Bombadier’s US$18.2 billion (RM59.6 billion). ■