Bombardier, Alstom, Hitachi to create rail behemoth?

Bombardier has approached France’s Alstom and Japan’s Hitachi to find a merger partner for its rail business as it struggles to contain costs that have eaten into margins, sources told Reuters.

The Canadian manufacturer of planes and trains is working with Citigroup and UBS to strike a deal that could help create a rail champion to better compete with China’s state-backed operator, CRRC.

Rail companies are eyeing consolidation to reduce costs through scale in a market dominated by CRRC, the world’s largest train maker.

Bombardier has been reviewing several rail merger scenarios in recent months which also involved a possible deal with Germany’s Siemens and a Chinese counterpart, but these options failed to gain traction, one of the sources said.

It remains in active talks with Alstom, one of its closest rivals in Europe, while also looking at Hitachi as another merger option, the sources said, requesting anonymity as the matter is confidential.

Full Content: Ottawa Citizen

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