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Alstom confirms talks on potential $7 billion Bombardier deal

A $7 billion deal could help French train maker Alstom pick up speed in an increasingly competitive sector.

It's confirmed it's in talks to potentially buy the train business of Canada's Bombardier.

It would be a key deal for Alstom -- the maker of the TGV bullet trains which speed between French cities such as Paris and Nice.

Alstom is trying to compete with China's CRRC, the world's largest train maker.

Bombardier has been struggling to contain higher rail costs generated by problematic contracts in its nearly $36 billion order backlog.

A source told Reuters on Sunday (February 15) that Alstom was close to agreeing a deal that would give the unit a value of $7 billion.

Alstom shares were up 1.9% on Monday (February 16) morning.

But a deal would likely attract antitrust scrutiny.

Alstom was blocked last year by European regulators from merging with Germany's Siemens.

Some analysts though have said there could be less of a regulatory barrier to a Alstom/Bombardier tie-up as the pair has a lower European market share in high-speed rail and signalling.

An agreement with Bombardier would unite companies with an estimated $17 billion in combined revenues.