* French minister confirms GE wants to buy Alstom power arm
* Siemens ready to discuss "future strategic opportunities"
* President Hollande gathers ministers to discuss Alstom
* Minister says Siemens deal would create "champions"
* Alstom seeks shares suspension until Wednesday
(Adds detail on government meeting, Immelt visit, Alstom
By Benjamin Mallet and Maria Sheahan
PARIS/FRANKFURT, April 27 Siemens and
the French government intervened in General Electric's
plan to buy the power arm of Alstom on Sunday with an
alternative European "champions" tie-up proposal and a pledge to
act in France's national interest.
Though French trains-to-turbines maker Alstom is privately
owned, firebrand Economy Minister Arnaud Montebourg issued a
stark reminder of the influence the government holds over a
company that relies heavily on orders from state rail operator
SNCF and partly state-owned utility EDF.
"GE and Alstom have their calendar, which is that of
shareholders, but the French government has its own, which is
that of economic sovereignty," Montebourg said in a statement,
providing the first official confirmation of GE's offer.
GE boss Jeff Immelt was in Paris on Sunday to thrash out a
$13 billion deal for struggling Alstom's power turbines and grid
equipment. Montebourg had planned to meet him but the encounter
was postponed until later in the week after the minister
advertised an alternative proposal by German rival Siemens.
The Siemens proposal would create "two European and global
champions in the energy and transport domains - one around
Siemens, the other around Alstom", Montebourg said.
French President Francois Hollande gathered his top
ministers on Sunday evening to discuss Alstom's case. The
company said separately it would make an announcement no later
than Wednesday morning and that it had asked for its shares to
remain suspended from trading until then.
"Alstom continues and deepens its strategic reflection," it
said in a three-line statement.
Montebourg said the government would not accept any hastily
made decision, that it would seek to preserve France's jobs and
industrial base and would in particular be "extremely vigilant"
in ensuring the nation's nuclear industry remains independent.
The warning compels Alstom and GE to tread carefully.
However, sources familiar with the talks said these were very
"Alstom has received a firm offer from GE and an expression
of interest from Siemens. It's not at all the same kind of
commitment," one of the sources said.
TRAINS PLUS CASH
Earlier in the day, Siemens entered the fray with an
announcement that it had written a letter to "signal its
willingness to discuss future strategic opportunities" with the
French group. Siemens gave no further details.
A report on newspaper Le Figaro's website on Sunday said
Siemens was offering Alstom half of its train-making business
plus cash in exchange for its French rival's power turbines
Le Figaro said Siemens was proposing that Alstom take on the
Siemens high-speed trains and locomotives arm, but not its
metropolitan trains division. A report in Germany's Handelsblatt
outlined a similar scenario and put the value of the proposed
deal at 10-11 billion euros ($14-15 billion).
Alstom CEO Patrick Kron has said in the past he is against
creating a Franco-German train manufacturer.
As well as the power turbines arm GE wants to buy, Alstom
makes TGV high-speed trains and is one of France's top
Though Alstom is struggling with heavy debt and weak demand,
political sensitivities run deep in France.
Marine Le Pen, leader of the far-right National Front (FN)
party that won widespread support in last month's local
elections, said the government had "abandoned Alstom to be
dismantled for American or German profit".
A Siemens tie-up may be no more palatable to some than a
deal with GE. A decade ago, Alstom was rescued by a state-backed
restructuring when Kron and France's then-president, Nicolas
Sarkozy, both balked at the prospect of a Siemens acquisition.
A deal to sell Alstom's power assets, which account for
about 70 percent of total group revenue, would effectively break
up the engineering group and leave Alstom as a pure transport
business, building its TGV trains, other rolling stock and rail
Alstom's power assets include turbines for coal, gas and
nuclear plants, wind farms and systems for power transmission
and distribution. They generated around 15 billion euros or 70
percent of Alstom's global revenue in the last fiscal year and
are among the group's most profitable businesses.
Alstom is the world's top supplier of turbine generator sets
for nuclear plants. The company estimates that its equipment,
which is used to produce electricity but is not located inside
nuclear reactors, is used in 40 percent of nuclear plants.
Alstom employs 18,000 people in France, about 20 percent of
its total workforce, against GE's 10,000 French workers and
Siemens' 7,000. A source familiar with the matter said there was
lots of overlap between Siemens and Alstom's operations in
France, more so than with GE.
Alstom and Siemens are direct rivals in steam turbines,
offshore wind power, hydro power and grid. For its part, GE is
absent from offshore wind and hydro power and could use the
boost in steam turbines and grid.
Sources have said a deal with GE is backed by Alstom's main
shareholder, French conglomerate Bouygues, which holds
a 29 percent stake.
Before the news of an approach from GE, Alstom shares had
slumped 20 percent in 12 months on concerns over its cash flow,
prompting Bouygues to take a $1.9 billion writedown on its stake
in February. Trading of Alstom shares was suspended on Friday at
the request of market regulator AMF.
($1 = 0.7227 Euros)
(Additional reporting by Andrew Callus, Matthieu Protard and
Natalie Huet in Paris, Anjuli Davies in London and Soyoung Kim
in New York; Editing by David Goodman and Gareth Jones)