UPDATE 1-Bombardier says not in talks with Siemens on rail deal

(Adds Bombardier and analyst's comments, background)
By Allison Lampert and Maria Sheahan
MONTREAL/FRANKFURT, July 29 (Reuters) - Canadian plane and
train maker Bombardier Inc BBDb.TO denied a report on
Wednesday that it is in talks with German engineering group
Siemens AG SIEGn.DE on merging their rail units.
The denial by a spokeswoman for Montreal-based Bombardier
followed a Wall Street Journal report on Wednesday that cited
unnamed sources as saying that Bombardier and Siemens were in
such talks.
The newspaper said Bombardier was also in talks with other
potential partners. The company said earlier this year it was
exploring a public listing of a minority stake in its
railway-equipment unit.
Siemens declined to comment on the report.
The news comes after Siemens earlier this year downplayed
the idea that it could combine its rail assets, which include
trains, trams and signalling technology, with those of France's
Alstom ALSO.PA . ID:nL6N0WJ2CD
Bombardier, Siemens and Bombardier are among the world's
biggest rail-equipment makers.
In outlining its plans to list a minority stake in the
German-headquartered rail unit in May, Bombardier did not rule
out a deal in the future, noting that a public offering would
preserve its flexibility to participate in industry
consolidation. ID:nL4N0XY42V
A Bombardier merger with Siemens or Alstom could be
considered, sources familiar with the matter said at the time.
ID:nL5N0X73UD
Analysts, however, have expressed concern that any such
tie-ups among large European players Bombardier, Siemens and
Alstom, could face push back from regulators.
"We think that such a merger would face a significant
regulatory hurdle in Europe as both Bombardier Transportation
and Siemens Mobility are large players in Europe," said
Scotiabank analyst Turan Quettawala in a note to clients. "A
merger would also likely lead to significant layoffs in Europe,
which may be a concern for governments."