August 17, 2018 / 11:44 AM / in 2 months

Austria buys Siemens trains for up to 1.5 billion euros

VIENNA (Reuters) - Siemens (SIEGn.DE) will supply Austrian railway operator OeBB with trains worth up to 1.5 billion euros ($1.71 billion) in a timely boost ahead of a merger of the German group’s trains business with French rival Alstom (ALSO.PA).

FILE PHOTO: A TGV high-speed train built by Alstom is seen alongside a Siemens-built ICE high-speed train at Munich railway station, June 16, 2014. REUTERS/Lukas Barth/File Photo

OeBB and Siemens have signed a framework agreement for delivery of up to 700 trains over the next five years, the companies said on Friday, with an initial 375 million euro order of 21 long-distance trains for delivery by 2022.

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The trains can be used in Austria, Germany, Switzerland and Italy and can be adjusted for use in countries including Slovenia, Croatia, Hungary and Poland, Siemens said.

Production will start in April next year.

The Austrian order comes three weeks after Alstom secured a 2.7 billion euro order from France’s SNCF [SNCF.UL] for a new version of the high-speed TGV train.

Siemens and Alstom agreed in September to merge their rail operations with combined sales of about 15 billion euros in a move aimed at reducing their vulnerability to the global expansion drive of Chinese rivals.

However, the companies, both strong in high-speed intercity trains, have to wait until November to see whether the European Union approves the plan after regulators investigate whether competition and travelers would be disadvantaged.

Reporting by Kirsti Knolle; Editing by David Goodman

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