China's top two train makers to merge

China's top two bullet train makers, China CNR Corp. Ltd. and the CSR Corp. Ltd. will merge into a new company, according to a CSR Corp. announcement filed with the Shanghai Stock Exchange late on Tuesday.

The new company, which will inherit all the assets, liabilities, businesses, staff, contracts, certificates as well as all other rights and obligations of the two companies, will be named CRRC Corporation Ltd.

The merger will be conducted on the principles of equality, joint development, stable progress, and standard operations, according to the statement.

In technical operation, the merger will take place in the form of the CNR Corp. to be merged into the CSR Corp. through a stock swap agreement between the two companies-- 1 CNR Corp. share for 1.1 shares to be issued by the CSR. Corp., the announcement said.

The swap agreement will both apply to the A shares and H shares of CNR Corp., the statement said.

The statement said that the merger aims to build a new transnational and globally leading solution provider of high-end railway transport equipment.

The merger comes 14 years after the two were split in 2000. The then Ministry of Railways that became the China Railway Corporation in 2013, delineated the two companies' major sales domains with the Yellow River as the boundary. It also tried to set a boundary for the two in the overseas market to reduce their competition.

The move aims to avoid "in-fighting" during exploration of the global market.

The two companies, both listed in Shanghai and Hong Kong, once controlled China's entire high-speed rail market. They have produced about 80 percent of cargo trains in China and the majority of subway trains. Both have the ability to produce high-speed trains of the CRH380 series, which can run at 380 kilometers per hour.