A scale model of an AGV high speed train with the logo of Alstom. Photo: Reuters / Gonzalo Fuentes

Germany’s Siemens AG and French rival Alstom SA have announced a deal to merge their rail operations, forming a European champion that could better compete with China’s state-owned CRRC, Reuters reports.

The deal has also been hailed as a Franco-German industrial breakthrough for French President Emmanuel Macron.

The European train makers, along with Canada’s Bombardier, have been operating in the growing shadow of the massive CRRC, which boasts a US$35 billion annual revenue greater than all three combined. Bombardier was left out of the deal, despite also holding talks with Siemens.

In recent years CRRC has begun to spread its wings after years of China-focused work, winning deals in the Czech Republic and the UK just in the past year.

Bloomberg reports that the merger marks the end of a long and bitter rivalry between Siemens and Alstom, which reached a boiling point in 2011 in a public spat over the safety of their competing high-speed models.

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