April 08, 2015

CNR-CSR merger approved

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THE merger between China's two largest train builders, CNR and CSR, has been approved by China's Securities Regulatory Commission and the Ministry of Commerce, and according to Xinhua the process could be completed by June.

The merger has also received the green light from anti-trust authorities outside China in Australia, Germany, Pakistan and Singapore.

Trading in the shares in the two companies, which was suspended on March 30 awaiting regulatory approval of the merger, resumed on March 8 and quickly surged. CNR shares closed in Hong Kong 45% higher at $HK 14.80 ($US 1.91) and CSR ended the day's trading 45% higher at $HK 15.80.

The first appointments have been made to the new board of CRRC Corporation, the company to be formed following the merger. The presidents of CNR and CSR, Mr Cui Dianguo and Mr Zheng Changhong, have been nominated at executive directors, while the first president of CRRC will be announced shortly.

The two companies have both announced their results for 2014. CNR increased its annual turnover by Yuan 7bn to Yuan 104.3bn ($US 16.8bn) and boosted its net profit for the year by 33% to Yuan 4.49bn. CSR made a net profit of Yuan 5.31bn in 2014.

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