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China's top train makers finish merger plan
http://www.ecns.cn/business/2014/12-03/145282.shtml
Dec 3rd 2014, 09:06
2014-12-03 17:06 Xinhua
Two major Chinese train makers have completed a first draft plan for their merger, which was first announced over a month ago, a source with the authorities said.
The companies, CSR Corp. and China CNR Corp., have submitted their plan to the State Council for further discussion and approval, a source in the State-owned Assets Supervision and Administration Commission said, without disclosing more details of the plan.
But 21st Century Business Herald cited insiders from the government and companies who said that CSR will purchase all CNR shares via secondary public offering, and the latter will delist from the capital market.
The two companies are both listed in Shanghai and Hong Kong, with a combined market value of about 30 billion U.S. dollars. Their shares have been suspended for over a month, and the merger was first announced on Oct. 27.
The merger will create a new giant train manufacturer, renamed China Railway Vehicle Corp., which is expected to hold total assets of over 300 billion yuan (nearly 50 billion U.S. dollars).
The planned deal will facilitate the country's high-speed rail in "going global" and avoid cutthroat competition between the two major producers.
CSR's net profits increased 58.29 percent year on year in the first three quarters of 2014, with turnover of 84.89 billion yuan, while CNR's net profits grew even faster, but with less in operating revenues.
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