July 29, 2015 / 9:24 AM / 4 years ago

Bombardier says not in talks with Siemens on rail deal

MONTREAL/FRANKFURT (Reuters) - Canadian plane and train maker Bombardier Inc (BBDb.TO) denied a report on Wednesday that it is in talks with German engineering group Siemens AG (SIEGn.DE) on merging their rail units.

A picture shows the executive class compartment aboard a Frecciarossa 1000 high-speed train by Bombardier Transportation at the InnoTrans railway technology trade fair in Berlin, September 25, 2014. REUTERS/Thomas Peter

The denial by a spokeswoman for Montreal-based Bombardier followed a Wall Street Journal report on Wednesday that cited unnamed sources as saying that Bombardier and Siemens were in such talks.

The newspaper said Bombardier was also in talks with other potential partners. The company said earlier this year it was exploring a public listing of a minority stake in its railway-equipment unit.

Siemens declined to comment on the report.

The news comes after Siemens earlier this year downplayed the idea that it could combine its rail assets, which include trains, trams and signaling technology, with those of France’s Alstom (ALSO.PA).

Bombardier, Siemens and Bombardier are among the world’s biggest rail-equipment makers.

In outlining its plans to list a minority stake in the German-headquartered rail unit in May, Bombardier did not rule out a deal in the future, noting that a public offering would preserve its flexibility to participate in industry consolidation.

A Bombardier merger with Siemens or Alstom could be considered, sources familiar with the matter said at the time.

Analysts, however, have expressed concern that any such tie-ups among large European players Bombardier, Siemens and Alstom, could face push back from regulators.

“We think that such a merger would face a significant regulatory hurdle in Europe as both Bombardier Transportation and Siemens Mobility are large players in Europe,” said Scotiabank analyst Turan Quettawala in a note to clients. “A merger would also likely lead to significant layoffs in Europe, which may be a concern for governments.”

Additional reporting by Jens Hack in Munich; Writing by Euan Rocha in Toronto; Editing by Victoria Bryan; and Peter Galloway

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