Wednesday, December 31, 2014

Attack on the world market: Mega-Merger: China train giants unite – ABC Online

Attack on the world market: Mega-Merger: China train giants unite – ABC Online

Wednesday, 12.31.2014, 10:01
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The two largest Chinese train manufacturer, CNR and CSR, have come together to form a giant Zugkonzern. This creates a powerful competitor for companies such as Siemens.

The two largest Chinese train manufacturers have teamed up to compete in the world market with united force against rivals such as Siemens and Bombardier. After the announcement of the mega-merger between China CNR and CSR shares shot on Wednesday in Hong Kong and Shanghai steeply. Both had last market value of the equivalent of around 21 billion euros. The fusion through a share swap.

In a message to the Shanghai Stock Exchange, it was said that the merger should be “a new cross-border and global leader in high-quality web design create” as the official Xinhua news agency quoted. In the exploration of the world market so you should also “grave wars” between the two manufacturers of high-speed trains are avoided.

Competition for Siemens and Co.

The Chinese National rail industry was not until 2000 that the two producers in the north and south, North China (CNR) and China South Locomotive and Rolling Stock Corporation was (CSR), divided to encourage competition. The Zugbauer cooperation with foreign manufacturers such as Siemens, Bombardier from Canada, Alstom time were received from France and the Japanese Shinkansen producers to develop high-speed trains.

With the construction of the largest high-speed railway network in the world in China, the two manufacturers have developed their own trains, with which they make Siemens and other competitors today. In addition to high-speed trains both also produce 80 percent of freight trains and most metros in China. Both train manufacturers are among the largest state-owned enterprises in the country.

Increased focus on the world market

Their shares were traded on Wednesday for the first time since October 27 again. The trade was then exposed when the plans for the possible transaction became public. The newly created railway company has around 170 000 employees. The combined revenue estimated the Bloomberg news agency in the twelve months to September to 228 billion yuan, now converted 30 billion euros.

As China’s railway market is not as fast paced grow in the future and the capacities are large, both manufacturers must increasingly look to the world market. Both have but repeatedly delivered in tenders abroad ruinous price war.

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