MUNICH/PARIS - Siemens AG and Alstom SA have agreed to merge their rail businesses in a deal that brings together former archrivals from Germany and France to create a European transportation giant aimed at countering competition from outside.

Siemens will transfer its business making train and transit cars and signaling equipment to Alstom in exchange for a stake of just above 50 percent in the enlarged company, according to a statement.

The renamed Siemens Alstom, with sales of around 15.3 billion euros ($18 billion), will remain based in the Paris area. Alstom Chief Executive Officer Henri Poupart-Lafarge will keep his position and the chairman will be named by Siemens.