London (CNN Business) Alstom is pursuing a huge deal that could help it counter a growing threat from a Chinese rival.

On Monday, the French trainmaker said it has signed an agreement to acquire Bombardier's rail business for between €5.8 billion ($6.3 billion) and €6.2 billion ($6.7 billion).

The acquisition, which will be paid for via a mix of cash and shares, will improve Alstom's "global reach" and its ability to respond to the growing demand for "sustainable mobility," particularly in Europe, according to a company statement.

Alstom and Bombardier, which is seeking to reduce its debt burden as it nears the end of a five-year turnaround, had earlier confirmed the talks following a report from the Wall Street Journal

The Canadian company said the deal would enable it to focus exclusively on its aviation business.

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