* Siemens and MHI in talks over joint bid to counter GE
* French government says does not favour one offer over
* Siemens-MHI plan would play alliance card - sources
* Two French papers say Mitsubishi mulling stake in Alstom
(Adds French papers on Mitsubishi offer)
By Benjamin Mallet and Natalie Huet
PARIS, June 12 Siemens and Mitsubishi
Heavy Industries are trying to beat a bid by U.S.
conglomerate General Electric for Alstom with
an offer that would focus on alliances with the French
engineering group, sources said on Thursday.
The German and Japanese groups said on Wednesday they were
discussing a joint offer for Alstom's energy assets that would
compete with GE's $17 billion proposal and would be worth around
$9.8 billion, according to the Nikkei newspaper.
The Siemens-Mitsubishi plan would not be a direct buyout of
Alstom's power assets but would rather set up one or several
joint holdings in power, according to two sources familiar with
They added that Siemens was still ready to give Alstom its
train business as part of the deal, although the French group
has so far not shown much interest in such an asset swap.
Such a plan could, however, address calls from the
government to favour partnerships over a straight sale of
Alstom's power arm - 70 percent of group revenue. They fear the
company would be left vulnerable once it was reduced to its
smaller transport business.
Two French newspapers said on Thursday that Mitsubishi is
considering taking a direct stake in French engineering group
Alstom as part of an offer with Siemens.
Financial daily Les Echos said Mitsubishi is considering
buying part of French Bouygues's 29 percent stake in
Alstom and would also buy Alstom's steam turbines while Siemens
would take over its gas turbines.
At a later stage, after an expected offer for Alstom on June
16, Siemens would contribute its transport assets to Alstom,
which would remain a listed company with activities in power
grids, wind turbines and transports, Les Echos wrote.
Le Figaro said Mitsubishi would propose an alliance with
Alstom modelled on the Renault-Nissan alliance. That would
involve Mitsubishi taking a minority stake in Alstom's power
activities (excluding grids) or even buying part of Bouygues's
The paper also said Siemens would propose buying Alstom's
gas turbines unit and give Alstom its rail transport business.
Alstom is the maker of France's iconic TGV high-speed trains
and supplies power equipment used in 40 percent of the world's
It employs some 18,000 people in France, around a fifth of
its global workforce. It was rescued by the state from near
bankruptcy a decade ago and has since depended on public orders
for rail and power equipment.
France has tried hard in recent weeks to drum up better
offers for Alstom, saying it wanted to preserve the country's
jobs and industrial know-how and even giving itself powers to
veto a deal.
French President Francois Hollande, Economy Minister Arnaud
Montebourg and David Azema, the head of French state holding
company APE, met on Thursday to discuss the bids but made no
Another meeting is scheduled next week, an official at the
president's office said, stressing that the government did not
favour one offer over the other at this stage.
"Our demands have never changed. What are our goals? To
defend the country's energy independence, to maintain business
and decision-making in France and to obtain the most favourable
situation on the jobs front," the official said.
"It's against these criteria that we will continue to
examine the proposals on the table. As far as our method goes,
we don't have a preference for this or that proposal; we have
Montebourg has been vocal on the Alstom case and has
repeatedly warned against "tearing apart" the group, which he
sees as a symbol of France's engineering prowess. He has openly
favoured alliances and partnerships over divestment.
BREAKUP OR ALLIANCE?
News of Mitsubishi's partnership with Siemens emerged on
Wednesday, and Hitachi, a joint-venture partner with Mitsubishi,
said earlier on Thursday it also hoped to take part. The Nikkei
report said the two Japanese companies would set up a joint
venture to bid for Alstom's steam turbine operations, said to be
valued at 500 billion yen ($4.90 billion).
"The closer we get to the deadlines, the more we hear of
other groups being involved," said Didier Lesou, an Alstom union
representative from CFE-CGC. "If the Japanese are in too, that
would imply a breakup of Alstom's energy business. It's scary."
But two sources familiar with the matter, including one
close to Siemens, said that was not the spirit of a
Siemens-Mitsubishi plan, which would help allay antitrust
concerns and would play the card of an alliance as advocated by
"MHI's plan with Siemens is to leave as much as possible in
the hands of Alstom, to maintain a strong Alstom presence in
power and to build a partnership involving one or several joint
ventures, notably in turbines," said the other source, which is
close to the French government.
Alstom declined to comment. Siemens, which also declined to
comment, has said it plans to disclose a bid by Monday. Its
supervisory board will meet on Sunday evening, according to a
source close to the group.
GE agreed last month to extend its offer until June 23, at
the government's request.
(Additional reporting by Emmanuel Jarry in Paris and Jens Hack
in Munich; Writing by Natalie Huet and Geert De Clercq; Editing
by Andrew Callus, Larry King)