SHANGHAI: China is moving forward with the merger of its two top train makers, state media said on Wednesday, with a plan to create a massive group to export high-speed railway technology.

State media have previously said the merger of state-owned China CNR Corp. and CSR Corp. will help prevent “cut-throat” competition between the two when seeking business overseas.

The merger could also put the combined entity in a stronger position to take on the likes of Germany’s Siemens and Bombardier of Canada.

A draft plan for the merger has been submitted to China’s cabinet, the State Council, for discussion and approval, the official Xinhua News Agency reported.

It quoted a source from the State-owned Assets Supervision and Administration Commission, which manages state firms.

The new entity’s Chinese name will be “China Railway Rolling Stock Group”, the 21st Century Business Herald reported, citing an unnamed source.

CSR will take the lead, taking over CNR in an all-share deal and absorbing its business and employees as well as assets and debts, the newspaper said.

Neither company has commented on the proposed merger, which came to light in October through media reports.

The two companies have suspended their shares from trading pending “important” announcements, exchange filings show.

Published in Dawn December 4th , 2014