* Siemens says to decide on joint bid by June 16
* Mitsubishi CEO says deal would create value for France
* Source close to Alstom says joint bid to face hurdles
(Adds quotes, French govt comment, changes dateline)
By Jens Hack and Benjamin Mallet
MUNICH/PARIS, June 11 Siemens is in
talks with Mitsubishi Heavy Industries over a joint bid
for the energy assets of France's Alstom, a move which
could help the German firm overcome antitrust hurdles.
With a deadline looming for Siemens to submit an offer for
the Alstom assets, the Munich-based firm and its Japanese
counterpart issued a joint statement saying they would decide on
a possible bid by Monday.
Taking Mitsubishi on board could give Siemens more firepower
and flexibility as it mulls how best to counter a rival $17
billion bid for Alstom's power activities by U.S. conglomerate
Bloomberg reported earlier that one option being discussed
was for Mitsubishi to bid for Alstom's steam turbine and power
grid businesses while Siemens would acquire its gas turbine
operations. Steam turbines are used in coal and nuclear power
plants while gas turbines go into gas powered plants.
The move could help assuage concerns in Brussels about the
dominant position of a combined Siemens and Alstom energy
business, particularly in power grids.
Siemens is already a close second to Switzerland's ABB
in the global market for high voltage direct current
(HVDC) transmission gear, used for long-distance power lines and
all offshore wind parks.
"Collaborating with Mitsubishi would be a clever move in as
much as it addresses some concerns in the market that Siemens
could overburden itself with an Alstom takeover," said Union
Investment fund manager Christoph Niesel.
But Niesel said worries would persist that an Alstom deal
could distract new Chief Executive Joe Kaeser from a major
restructuring, announced only last month, which is designed to
refocus Siemens on profitable businesses.
A person close to Alstom also cautioned that splitting up
the French group between the German and Japanese firms could
encounter opposition from the French government, which has vowed
to defend its own interests in any deal.
Such a deal "would lead to a dismantling which would hardly
be accepted by the French government", the source said. Alstom
Chief Executive Patrick Kron has made clear he favours a deal
with GE over Siemens.
Alstom declined to comment on Wednesday.
A spokesman for French President Francois Hollande said
that Hollande wanted an update on Alstom's case but at this
point did not have a preference for a possible bidder. Hollande
will meet with his prime minister and economy minister to
discuss Alstom on Thursday, the official said.
In the joint statement, Mitsubishi Heavy Chief Executive
Shunichi Miyanaga said his company had been invited by Siemens
to join forces.
"We firmly believe that we can substantially contribute to a
partnership solution for Alstom which will create value for all
parties involved, including the country of France," he said.
Kaeser said he looked forward to working with Mitsubishi to
create "a long-term oriented solution for Alstom, MHI and
The Siemens chief, who took the helm of the company last
summer, told investors in New York in May that the U.S. shale
gas boom would bolster demand for gas turbines, and that
profitable long-term maintenance contracts with gas power plant
operators added to the business's allure.
But doubts have persisted about whether he is serious about
a deal with Alstom, or is just seeking to push the price up for
U.S. rival GE.
The French government sought better offers than the one GE
initially put forward to preserve jobs and the country's energy
independence, pressuring Alstom to also open its books to
But GE last month strengthened its position with a pledge to
create 1,000 new jobs in France, winning recognition from Paris
that it had made a more acceptable offer.
"We continue to have constructive discussions about the
details of our proposed alliance with Alstom and remain
confident," a GE spokeswoman said in an emailed statement on
Alstom is a supplier of turbines for nuclear plants
worldwide, and Paris has said it is concerned that a straight
sale of its power arm could hurt France's position in the energy
The government has also said it is worried that Alstom,
which makes France's iconic TGV high-speed trains and was bailed
out a decade ago, could be too weak as a standalone rail group.
Mitsubishi has recently moved to widen its footprint in
Europe. It took over a majority stake in an Austrian metals
business from Siemens in May and last year teamed up with
Denmark's Vestas Wind Systems for an offshore wind
turbine joint venture.
(Writing by Ludwig Burger and Noah Barkin; Additional reporting
by Lewis Krauskopf; Editing by Andrew Roche and Elaine