German industrial group Siemens and French rival Alstom have agreed to merge their rail operations, creating a European champion to better withstand the international advance of China's state-owned CRRC Corp. Laura Frykberg reports
France's TGV trains are a symbol of national pride - they showcase French engineering skills and provide jobs. The company that makes them - and other models - hopes it's now better placed to protect them. Alstom is joining forces with German rival Siemens - merging their rail operations. They're hoping it will make them better able to fight off competition from China's giant CRRC. (SOUNDBITE) (English) SIEMENS CHIEF EXECUTIVE OFFICER JOE KAESER, SAYING: "Together, with our friends at Alstom we are creating a new European champion in the rail industry with a global reach." Siemens will own 50 percent plus a few shares of the joint venture. The French firm will supply the CEO. It's hoped that will silence critics who say France is giving up control of another national industrial icon. (SOUNDBITE) (English) ALSTOM CHIEF EXECUTIVE OFFICER HENRI POUPART-LAFARGE, SAYING: USE BIT IN ITALICS MAYBE "I'm conscious of the history behind these two companies, these are two companies which are deeply rooted in their own markets, in their domestic markets as well with extremely strong expertise, strong know-how, strong political emotion attached to it, we need to pay tribute to all of that." Siemens Alstom, as it will be known, will have combined sales of 15 billion euros and more than 62,000 employees. (SOUNDBITE) (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "I think the number's around 470 million euros of cost saving synergies in four years time. This of course is a massive benefit for the combined company that allows them to invest and it allows them to gain to close the competitive gap." The deal still needs to be approved by Alstom shareholders and the regulators. But if it goes ahead it will be another blow to Canada's Bombardier which also wanted a rail deal with Siemens. It's just lost round one of an aviation battle with Boeing and will now have to fight China's rail makers on its own.