Siemens shares spike on reports of Bombardier merger

German industrial giant Siemens chugged higher on Tuesday after reports that it has entered negotiations with Bombardier to merge the two companies’ train operations.

Bloomberg reported the news on Tuesday, citing people familiar with the matter as saying that the train-making and signalling operations would potentially be valued at more than $10bn.

Siemens' share price spiked just over 1% on the reports, before levelling out at 0.04% higher for the day as of 16:14 GMT, while Bombardier was 4.5% higher on the Canadian stock exchange.

While no final decisions have been made on the merger, it is expected to be the subject of scrutiny from antitrust authorities as well as trade unions.

Siemens’ business has become much more streamlined in recent years, with the German company having in the past been comprised of 12 separate units, including a wide variety of electrical equipment as well as the control of a mobile network.

Several of its operations have been sold off as CEO Joe Kaeser attempts to narrow its focus on its energy and industrial software.

Bombardier's transportation business is estimated to be worth at least $5bn, having sold 30% of the operations last year.

Both Bombardier and Siemens have suffered through increased competition from Chinese firms, which are growing internationally and threatening to haemorrhage market share from the companies.