Germany's Siemens has confirmed that it will merge its rail operations with France's Alstom to create "a new European champion in the rail industry", reports City AM.
Siemens makes the inter-city ICE trains, while Alstom builds the French equivalent, TGV trains. They have combined sales of €15.3bn (£13.4bn)
The new group, now named Siemens Alstom, will be headed up by Alstom boss Henri Poupart-Lafarge. Siemens will receive newly issued shares in the combined firm representing 50 per cent of Alstom's share capital on a fully diluted basis.
The French government, which owns around 20 per cent of Alstom, will ditch its stake as part of the deal.
The firms said they were largely complementary in regards to activities and geographies, with Alstom's presence in the Middle East, Africa, India, and middle and south America, and Siemens in China, the US, and Russia.
Joe Kaeser, Siemens' president and chief executive, said: "This Franco-German merger of equals sends a strong signal in many ways.
"We put the European idea to work and together with our friends at Alstom, we are creating a new European champion in the rail industry for the long term. This will give our customers around the world a more innovative and more competitive portfolio."