Siemens stock gains on reports of rail tie-up schemes

Shares in German industrial giant Siemens were boosted Thursday by swirling rumours that it was in talks with France's Alstom and Canada's Bombardier about combining rail businesses.

The stock gained 1.4 percent by 1500 GMT to trade at 117.55 euros ($140.11), outperforming the DAX index of leading German shares.

In Paris, Alstom added 4.3 percent against a flat market, reaching 31.81 euros.

Munich-based Siemens, whose products range from wind turbines to trains to medical equipment, has been in talks with Bombardier for months.

But business daily Les Echos reported the French government encountered a favourable response from Chancellor Angela Merkel when it pushed for German counterparts to smile on a Siemens-Alstom rail tie-up.

The move was part of a broader push to deepen Franco-German ties since the election of President Emmanuel Macron, sources said.

Executives at the German firm have an offer from Bombardier in hand, but are taking the time to explore an option with Alstom, an anonymous industry expert told the paper.

Siemens offered Alstom a deal in 2015 under which it would have acquired the French firm's energy assets in exchange for ceding its rail business.

Alstom eventually sold its energy assets to General Electric.

Citing anonymous sources, Bloomberg News reported Thursday that one scenario Siemens bosses are considering is trading the group's rail business for a large stake in Alstom.

Siemens "could also look at joint ventures" with Bombardier, another source told the agency, including one for rolling stock and one for signalling.

Alstom declined to comment on the reports when contacted by AFP, while Siemens and the French transport ministry could not immediately be reached for comment.

Pressure is mounting for consolidation in the European rail sector in part due to competition from Chinese behemoth CRRC.

But competition concerns and fears about job losses at the different players could still slam the brakes on any plans to tie the knot

Source: AFP