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Alstom shares advance as Siemens deal draws nearer

PARIS, Sept 26 (Reuters) - Shares in Alstom gained ground on Tuesday, as sources familiar with the matter told Reuters that German rival Siemens was likely to decide on pursuing a multibillion-dollar rail merger with the French industrial group.

Alstom shares were up 0.8 percent in early session trading, among the top performers on France's SBF-120 index, while Siemens shares retreated 0.5 percent.

Siemens is expected to decide on Tuesday on pursuing a deal with Alstom rather than Canada's Bombardier, two sources familiar with the matter told Reuters.

Siemens and Alstom are strong in high-speed intercity trains with their ICE and TGV models. Siemens is also the leader in signalling technology, while Bombardier - whose transportation headquarters are in Berlin - is stronger in commuter and light-rail trains.

A Franco-German deal between Siemens and Alstom would also have political ramifications, since the French government has a 20 percent stake in Alstom. (Reporting by Sudip Kar-Gupta; Editing by Sarah White)