GE aims to fend off rival bid by negotiating terms with French gov't-source

June 16 Mon Jun 16, 2014 5:57pm EDT

June 16 (Reuters) - General Electric wants to avoid a bidding war with Siemens and Mitsubishi Heavy Industries over Alstom, but it is talking to the French government about potentially changing non-price terms of the bid, a person close to GE told Reuters.

GE is talking to the French government about jobs, bringing in new French investors to the power unit and providing access to nuclear steam turbine technology and some kind of deal to strengthen the transport businesses, according to the person who is familiar with the discussions.

The source said "there is flexibility" around those four areas and that "the talks are ongoing."

The talks are focused on nuclear technology associated with the French company's steam turbine business. The source said GE would work with the French government and the industry to make sure that Areva, the French nuclear power giant, had access to that technology.

GE is also open to French investment for the power business of Alstom, with those investments coming either from private or public entities, the source added.

The talks would be looking at "the potential of some sort of tie up" with GE's signal unit with Alstom's transport business.

GE had offered 12.4 billion euros ($16.88 billion) for all of Alstom's energy arm, which includes its thermal power, renewable power and grid businesses.

General Electric's bid was challenged by Germany's Siemens and Japan's Mitsubishi Heavy Industries presented a joint offer to France's Alstom on Monday that included 7 billion euros ($9.5 billion) in cash.

Sources familiar with the matter said the rival bid, which was announced on Monday, would be worth over 1 billion euros more than GE's, taking into account the value of the parts of the power businesses that would remain under Alstom's control. (Reporting by Christian Plumb in New York and Tasim Zahid in Bangalore; Editing by Ken Wills)

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