European train giants to merge after competition from China's CRRC

Alstom and Siemens, Europe's leading train manufacturers, have agreed to join forces....
The combined company will be called Siemens Alstom, and will merge only the rail operations of the two companies.

Until recently, Alstom and Siemens had been strong rivals, competing against each other on a variety of contracts including making new trains for Eurostar, who switched suppliers from one company to the other.

So why the merger? The answer lies in the growing global significance of China's CRRC, now the largest rolling stock manufacturer in the world.

Over the last few years, CRRC's products have been in increasing demand overseas, winning contracts that might previously have been awarded to Alstom or Siemens.

Recent orders from Macedonia, the UK and the USA for CRRC have caused growing concern at Alstom and Siemens.

"This Franco-German merger of equals sends a strong signal in many ways. We put the European idea to work and together with our friends at Alstom, we are creating a new European champion in the rail industry for the long term. This will give our customers around the world a more innovative and more competitive portfolio", said Joe Kaeser, President and CEO of Siemens AG.

"The global market-place has changed significantly over the last few years. A dominant player in Asia has changed global market dynamics and digitalization will impact the future of mobility. Together, we can offer more choices and will be driving this transformation for our customers, employees and shareholders in a responsible and sustainable way", Kaeser added.