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UPDATE 1-Siemens to pick Alstom or Bombardier for rail talks within days - source

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* Siemens in talks with both Alstom and Bombardier - source

* To pick one for further talks within days - source

* Alstom deal could make Siemens majority owner - source (Recasts with source on talks, adds Siemens share price, background)

MUNICH, Sept 21 (Reuters) - Siemens is in talks to merge its rail business with that of either Alstom or Bombardier and will pick a preferred partner within days for further negotiations, a person familiar with the matter told Reuters on Thursday.

Rail mergers have become a trend over the last few years as global companies seek to contain costs and Western ones struggle with competition from China's state-backed CRRC.

The three main rivals to CRRC - Bombardier, Siemens and Alstom - have talked to each other about combining their businesses in various arrangements over the past years.

Sources told Reuters in July that Bombardier and Siemens were in the final stages of talks to combine their rail operations.

Under an alternative scenario involving Alstom, Siemens would transfer its rail operations to the French group and become a majority shareholder of Alstom, the source told Reuters on Thursday.

Shares in Alstom climbed as much as 2.6 percent on news of the talks, first reported by Bloomberg earlier on Thursday. Siemens was up 0.8 percent at 116.90 euros.

Siemens declined to comment and officials at Bombardier Transportation in Berlin were not immediately available for comment. An Alstom spokesman said he had no immediate comment. (Reporting by Alexander Huebner; Additional reporting by Blandine Henault, Georgina Prodhan and Maria Sheahan; Editing by Richard Lough and Mark Potter)