Berlin Germany - German industrial conglomerate Siemens and Canada's Bombardier are in talks to combine their rail operations in a joint venture, two people close to the matter told Reuters on Tuesday.
"Talks are occurring and are already pretty far advanced," one of the people said, who asked not to be named because the negotiations are confidential.
The news was earlier reported by Bloomberg, lifting Siemens shares to a record high of €129.80.
The stock later slipped back, but remained near the top of the German blue-chip DAX, which was down 0.9 percent.
Siemens and Bombardier declined to comment.
Bombardier, Siemens, and France's Alstom, three of the world's biggest rail equipment makers, have talked to each other about combining their businesses in various arrangements over the past years.
The drive to consolidate has taken on new urgency in light of the rising global ambitions of China's CRRC Corporation, the result of a 2015 merger of the country's two top players.
The deal would require clearance from antitrust authorities and face potential opposition from unions.
It is not yet clear which of Siemens or Bombardier would eventually consolidate the entity in the event of an agreement, the source said.