UPDATE 1-Siemens likely to pick Alstom for rail merger on Tuesday -sources

(Adds details on deal, context)

MUNICH/FRANKFURT, Sept 25 (Reuters) - German industrial group Siemens is likely to decide on Tuesday to pursue a rail merger with French rival Alstom rather than Canada's Bombardier, two sources familiar with the matter told Reuters.

"I think Alstom will make it," one of the people said on Monday. The second person said the Siemens supervisory board would decide the matter on Tuesday, also describing Alstom as the frontrunner.

Siemens is expected to hold just over 50 percent of the shares in the intended joint venture, while the chief executive would come from Alstom.

A Siemens spokesman declined to comment on the possible merger, which would create a business with combined sales of nearly 15 billion euros ($18 billion).

Alstom was not immediately available to comment.

The decision would be a blow for planes-and-trains maker Bombardier, which faces a separate battle this week to protect aerospace jobs in Quebec and Northern Ireland amid a subsidy row with Boeing.

Bombardier shares fell sharply on Friday after a report that Siemens was in advanced talks with Alstom.

Siemens shares were up 0.4 percent by 1026 GMT on Monday, while Alstom shares were up 0.7 percent. ($1 = 0.8414 euros) (Additional reporting by Maya Nikolaeva and Tim Hepher in Paris; Editing by Arno Schuetze and Victoria Bryan)