* Joint offer could be approved by Siemens board on Sunday
* Siemens would acquire gas turbines from Alstom, sources say
* Mitsubishi would set up JV in steam turbines, take Alstom stake
* Under separate train deal, Germany might match French stake
By Jens Hack and Benjamin Mallet
MUNICH/PARIS, June 13 Germany's Siemens and Japan's Mitsubishi Heavy Industries are putting the finishing touches on a joint offer for Alstom's turbine businesses that includes a cash element of roughly 9 billion euros, sources close to the bidders said.
Under the complex offer, Siemens would acquire the gas turbines business of Alstom while Mitsubishi would inject cash and industrial assets into a joint venture in steam turbines, the sources said.
As part of the deal, Mitsubishi and the French government would take stakes in Alstom, acquiring a portion of the shares currently held by French group Bouygues, one source close to the matter specified.
Alstom would keep control of its energy transmission and renewables activities, which would not be part of the Siemens-Mitsubishi bid.
In a second step that one source described as "completely independent" of the turbines deal, Siemens and Alstom would combine their rail activities.
It is still unclear what stakes the two firms would have in this business. If the French government took a stake, one senior source said Berlin would also consider buying shares in order to stay at "eye level" with Paris in a group combining the high-speed ICE and TGV train activities of Siemens and Alstom.
"What is being discussed is an industrial and commercial partnership in turbines," one source familiar with the matter told Reuters. "But it's not enough for a deal to make sense on paper. You need to see the stars align."
Two separate sources said Siemens and Mitsubishi would be offering about 9 billion euros in cash under the turbines offer. That compares to the 12.35 billion euros ($16.9 billion) offered by U.S. conglomerate General Electric for all of Alstom's energy assets, including turbines, renewables and grid operations.
"The offer can't be compared with that of GE as they're so different in nature," another source close to Mitsubishi said.
Siemens, Alstom and Mitsubishi all declined comment.
Under the proposed offer, which is expected to be rubber stamped by the supervisory board of Siemens on Sunday evening, Alstom would have a future in the energy business and be at the centre of a European rail champion -- both potentially attractive prospects for the French government.
"GE could still win a deal but for that they would have to do what the French government wants, in other words come up with an alliance rather than a buyout," the source close to the matter said.
But the complex proposal would also turn Alstom into an unwieldy holding company, with myriad stakes in disparate businesses. That may ultimately make it difficult for Siemens and Mitsubishi to convince Paris that its deal is a jobs creator.
When GE Chief Executive Jeff Immelt met with French President Francois Hollande last month, he promised to create 1,000 new engineering and manufacturing jobs within three years, according to sources close to the talks.
French Economy Minister Arnaud Montebourg reiterated in a newspaper interview on Friday that he favoured an aliiance that preserved Alstom's identity, industrial sites, decision centres and jobs. (Additional reporting by Alexander Huebner in Frankfurt, Gernot Heller in Berlin, Jean-Baptiste Vey & Natalie Huet in Paris; Writing by Noah Barkin)