CSR Corp denies CNR merger rumour
CSR Corporation yesterday denied media reports of a merger of its parent with the parent of its rival, China CNR Corporation. The two state-owned firms are the nation's biggest makers of rolling stock, accounting for over 90 per cent of the mainland market.
CSR has not been in any discussion with CNR on any merger, CSR authorised representative and company secretary Thomas Wong told the South China Morning Post.
'We don't think a merger is possible because the government spent so much to separate the two companies and launch their IPOs. It's not possible that we can now come together,' said Wong.
CNR listed in Shanghai last year while CSR is listed in Hong Kong.
In a statement posted on its website yesterday, CSR said it had not been in any negotiation nor was it looking at a merger with CNR, and it expressed regret over the media reports of a merger.
A mainland newspaper, the 21st Century Business Herald, reported that the government was studying a possible merger of the parent companies of CNR and CSR, citing an unidentified executive from CSR.
CSR's parent is China South Locomotive and Rolling Stock Industry Group. CNR's parent company is China Northern Locomotive and Rolling Stock Industry (Group).
CSR stocks rose 5 per cent to HK$11.34 yesterday, while CNR's stock rose 3.3 per cent to 8.06 yuan (HK$9.46). From December 28, 2009, till yesterday, CSR's shares have risen 13.4 per cent while CNR's have gained 20.3 per cent in value.
A merger is not feasible because the government split its rolling stock industry into two companies as part of the obligations that came with its World Trade Organisation membership, said Wong. 'Does it mean all airlines in China will merge into one airline?'
CSR aims to grow its turnover to 100 billion yuan by 2012 and 150 billion yuan by 2015, when it hopes to be the world's largest rolling stock maker, said Wong. It is now the world's second-largest rolling stock company behind Bombardier of Canada.