SHANGHAI (AFP) – China will soon merge its two biggest train makers to create a multi-billion-dollar firm as it seeks export markets for its high-speed railway technologies, the official Xinhua news agency reported, citing sources in the firms.
The two state-owned companies, China CNR Corp and CSR Corp, are likely to release “important news” this weekend, the sources told Xinhua late Tuesday following market speculation of a merger.
CNR and CSR both supply trains for China’s high-speed rail network, the world’s largest, and the deal will help prevent “cut-throat” internal competition, state media said.
Each is valued at around $13 billion, with CSR having a slightly higher market capitalisation.
The two firms’ shares have been suspended on the Hong Kong and Shanghai exchanges, where both are dual-listed, since Monday pending “important” announcements, according to exchange filings.
The companies share the same origin, a rail vehicle manufacturer spun off from the railway ministry in 2000 and split into two.
After multiple scandals the railway ministry itself was merged into another state agency in March last year, and its commercial functions turned into a new company, the China Railway Corporation.