Posted 12th April 2017 | 2 Comments

Merger talks boost Bombardier, Siemens

AMENDED 13.55

SHARES in train builders Bombardier and Siemens rose sharply last night as rumours spread of a possible merger of their train-building businesses.
 
Such a merger would be likely to create the largest train builder in the world, with potential sales of £13 billion.
 
It was reported earlier this year that the two companies had been in preliminary discussions, but there was no confirmation from either side at the time.
 
However, both companies are under increasing pressure from train builders in the Far East, particularly China, where CRRC was formed in 2015 by merging the country’s two largest rolling stock construction companies. More recently, there has been speculation that Chinese companies want to bid for contracts to build trains for HS2, possibly by joining forces with one or more British companies. Knoor Bremse at Wolverton is thought to have been one of the companies who have been in preliminary discussions with a Chinese delegation, but industry sources say that, if so, KB is not the only possible British partner.
 
Siemens’ main base is in Germany, while Canadian Bombardier maintains its global transportation HQ in the same country. Bombardier builds rolling stock for the British market in Derby, where it is currently constructing trains for London’s Elizabeth line and London Overground, as well as the last batch of Class 387s for service on Great Western Railway. Siemens, meanwhile, has provided a new Velaro fleet for Eurostar and is currently building fleets for Thameslink and South West Trains at Krefeld in the German Rhineland. Further ahead, both companies have expressed interest in providing London Underground’s next tranche of rolling stock, amounting to 250 tube trains.
 
Bombardier shares rose 6.8 per cent in Toronto on Tuesday, while Siemens was up 2.4 per cent before retreating again but was still 0.4 per cent higher at the close.
 
Both companies are again declining to comment.

Reader Comments:

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  • MikeB, Liverpool

    @Editor. In a way, I believe people do care about company ownership. Over the years, we have seen many companies of British origin (in various business sectors) disappearing into foreign ownership. Including train building, which was mainly absorbed into Bombardier and Alstom - the latter closing their last UK assembly plant at Washwood Heath in 2005 - leaving (I think) no British ownership in train building. It was as though, around the 1980s, it was decided that all British train building would be better off under foreign ownership. With regard to the possible merger of the Bombardier and Siemens train building businesses, would they be willing to work with Chinese companies, from whom they are currently under increasing pressure? Perhaps Hitachi, who now have their Global Rail HQ in London, might be a prospective partner?

  • MikeB, Liverpool

    "Speculation that Chinese companies want to bid for contracts to build trains for HS2, possibly by joining forces with one or more British companies". Can anybody identify any British companies currently involved in train building? No, of course not! The only train builders we have at the moment are of course Bombardier and Hitachi - both foreign companies. Perhaps the companies that the Chinese wish partner may merely be part of the present train building supply chain but even many of them are probably subsidiaries of foreign companies.
    [We could have said 'British-based' companies, but frankly we are not too troubled about ultimate ownership, which is now very diffuse everywhere: trams in many European cities are built in Austria by a company with its transport HQ in Germany and its main HQ in Canada. Does anyone care?--Editor.]