* Sources say Alstom accepts 10 bln euro GE bid
* Talks not exclusive, Alstom can hold talks with Siemens
* Siemens preparing a bid which analysts see as defensive
* Alstom trade to resume Wednesday after info on bids
(Recasts; adds Immelt letter)
By Matthieu Protard and Maria Sheahan
PARIS/FRANKFURT, April 29 The board of Alstom
accepted General Electric's 10 billion euro
($13.82 billion) bid for its energy unit on Tuesday, several
sources familiar with the situation told Reuters.
Sources said GE is not in exclusive talks with Alstom. The
French transport-to-turbines group is also set to receive an
offer from its much larger German competitor Siemens AG
, which said it had sent a letter to Alstom after its
managing and supervisory boards had decided to make an offer.
Alstom is expected to make a statement about the two offers
early on Wednesday, before its shares, suspended since late last
week, resume trading.
The rival bids have triggered a fierce national debate about
the fate of power turbine and train manufacturing in France -
both integral to the country's engineering pedigree. The French
government has said it favours the Siemens offer, which via an
asset swap would create two European sector champions: Siemens
in electricity and Alstom in trains.
"Alstom's board has accepted the GE offer, it will be
examined by an independent committee," one source close to the
talks told Reuters.
"The two groups will not enter into exclusive negotiations.
This means Alstom cannot go and look for other offers, but there
is nothing to stop it from examining offers it receives without
soliciting them," the source added.
Earlier on Tuesday, Germany's Siemens said it
would make an offer to Alstom if given four weeks to examine its
books and draw up a detailed plan to rival a move by GE.
"The prerequisite is that Alstom agrees to give Siemens
access to the company's data room and permission to interview
the management during a period of four weeks, to enable Siemens
to carry out a suitable due diligence," Siemens said.
It gave no further details of its plans, but at the weekend
Siemens approached Alstom with a proposal to exchange part of
its train business plus cash for Alstom's power arm. In a short
letter, it had outlined its proposal worth $14.5 billion.
In a letter to French President Francois Hollande, published
by financial daily Les Echos and authenticated by GE, GE Chief
Executive Jeffrey Immelt responded to several of the French
government's key concerns about the U.S.-based firm's offer.
Immelt said that if GE were to buy Alstom's energy unit, it
would boost employment in France and locate global headquarters
for several key businesses in the country, including for grids,
hydro power, offshore wind and steam turbines.
GE would also work with the French government, utility EDF
and nuclear group Areva to protect France's
strategic nuclear sector and its exports and would be willing to
sell Alstom's wind turbine activities to French investors.
GE also offered France a representative for its board, and
offered to look into the possibility of a transportation
joint-venture with the remaining transport activities of Alstom,
which are widely considered to be too small to survive
France's Socialist government has declared that it must have
a say in the outcome of the bidding war, as thousands of jobs
are at stake and state-owned utility EDF and the
national railways are major clients of Alstom.
"There aren't only financial interests at stake in this
matter; there are also industrial, social and human interests,"
Economy Minister Arnaud Montebourg said after a meeting with
unions. "The government does indeed intend to defend our
Alstom CEO Patrick Kron informed Montebourg of GE's interest
Just over a week before Siemens boss Joe Kaeser presents his
future vision for the Munich-based conglomerate, investors in
Siemens were sceptical about a potential deal.
"We would have preferred a less risky strategy of organic
growth," said Tim Albrecht, fund manager at DWS Investment.
A fund manager who declined to be named said: "Until last
week, Alstom was seen as dead, and its products were not thought
to be competitive."
He said a purchase would be a 180-degree turn and Siemens
would need very good arguments to justify it strategically.
Some investors may also be wary of a French-German deal,
given problems with previous cross-border tie-ups, such as
defence and aerospace company EADS and drugmaker
Aventis, which have both been plagued by battles for control.
Many analysts and investors said they believed the Siemens
move was primarily defensive.
Rob Virdee, analyst at Espirito Santo Investment Bank, said
the offer looked like a move to stop GE's expansion in Europe.
Industry veterans say Alstom and Siemens have very different
corporate cultures, and have competed aggressively against one
another for decades.
An industry insider told Reuters that no one at Alstom wants
a deal with Siemens because everyone, from the low-level worker
to Kron, recalls how Siemens lobbied aggressively against state
aid for Alstom when it almost went belly-up in 2004.
Siemens shares closed up 0.6 percent compared with a 1.5
percent rise in shares on the blue-chip DAX index.
($1 = 0.7237 Euro)
(Additional reporting by Arno Schuetze and Sabine Wollrab in
Frankfurt, Irene Preisinger in Munich, Benjamin Mallet, Mark
John, Geert De Clercq and Gregory Blachier in Paris, Lewis
Krauskopf in New York, and Sophie Sassard in London; Writing by
Andrew Callus, Mark John, Madeline Chambers and Geert De Clercq;
editing by Will Waterman and David Gregorio)