Shares skyrocket on China train firms mega merger

Chinese listed shares of the world's largest train makers
skyrocketed on Wednesday after the firms announced plans
to merge.
China CNR and CSR said they would merge to create a $26bn
(£16.7bn) firm to compete with giants like Canada's
Bombardier and Germany's Siemens.
Shares of CNR jumped 45% in Hong Kong, while its Shanghai
stocks were up at the daily limit of 10% on Wednesday.
CSR shares were also up over 32% and 10% in both indexes
respectively.
The companies shares surged despite a private survey that
showed manufacturing data in the world's second largest
economy had contracted for the first time in seven months in
December.
Their shares had been halted from trade on 27 October and a
statement was issued about trading resuming on 31
December.
State-owned giants
Both state-owned firms are the biggest of its kind in the
world because of booming domestic sales.
The new company would have a combined annual revenue of
about $32.7bn based on 2013 statistics, compared with
Siemens' $96.5bn and Bombardier's $18.2bn revenues last
year, according to Reuters.
The merger would help them compete for global rail deals, the
companies said in a joint statement on Tuesday.
"The merger is expected to improve efficiency in the use of
resources, effectively reduce operating costs and realize the
internationalization strategy, thereby promoting competition
globally," it said.
In October, CNR gained global attention after it was awarded
a deal to supply trains to major US city Boston.
CSR, meanwhile, was a part of a consortium that got a
$3.75bn high-speed railway contract from Mexico in
November, but that was cancelled over controversy in the
bidding process.
The merger still requires approval by shareholders and
Chinese authorities.
Both firms were spun off from the former railway ministry in
2000.