Business / Industries

China trainmakers seek control of Bombardier's rail unit

(Agencies) Updated: 2015-04-30 08:22

A purchase of Bombardier's rail assets would "open the doors for the Chinese to all Western train markets," one of the sources with direct knowledge of the situation said.

"It would be the most concrete example of China executing on its Belt and Road strategy," the source said, referring to China's aim to create a modern Silk Road economic belt through a network of infrastructure links through Central, West and South Asia to Europe and Africa.

"We believe CNR/CSR would be the most likely and viable option for the company," said RBC Capital Markets analyst Walter Spracklin in a note to clients, noting that Bombardier already has joint ventures with the two Chinese companies.

A purchase of a stake in the Bombardier unit by Chinese companies would require approval from the Ministry of Commerce, the National Development and Reform Commission and the China Securities Regulatory Commission as well as European Union, US and Canadian regulators.

In February, a CNR official told Reuters that the firm was interested in buying foreign rail-linked technologies and had been in touch with some companies.

Bombardier, whose presence in China goes back to 1954, currently has a number rail joint ventures in the country, three of them with CNR and CSR units.

Shares of Bombardier rose 2.4 percent to C$2.55 on the Toronto Stock Exchange on Wednesday.

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