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Alstom offers not good enough for France

Tuesday, Jun 17, 2014 - 02:33

June 17 - After submitting their joint bid for French firm Alstom's energy assets, Germany's Siemens and Japan's Mitsubishi Heavy Industries face scrutiny by the French government, which has already criticised a rival bid by GE. Joanna Partridge reports.

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An international charm offensive. The bosses of Germany's Siemens and Japan's Mitsubishi Heavy Industries took their joint bid for French firm Alstom's energy assets to the French President. Under the deal, Siemens has offered to buy Alstom's gas turbines business for 3.9 billion euros in cash. In a separate joint venture, MHI would buy stakes in Alstom power assets including hydroelectric power equipment and grid. MHI would also inject just over 3 billion euros in cash into Alstom, and offer to take a stake of up to 10% in the firm, from shareholder Bouygues. This offer challenges a bid from U.S. giant General Electric. Joe Kaeser is Siemens CEO. SOUNDBITE: Joe Kaeser, Siemens CEO, saying (English): "This concept which we are offering for Alstom, for Mitsubishi and Siemens, also for France, Germany and the industrialised world is superior. Superior in financial aspects, it's superior in strategic industrial aspects and it is superior last but not least in the social aspects." Sources said the Siemens-MHI offer would be worth over one billion euros more than GE's, which wants to buy all of Alstom's power businesses. But it's not just Alstom which will decide. The French government wants a say - it bailed the company out a decade ago, and also considers Alstom's transport and energy activities to be vitally important nationally. Paris has previously criticised GE's offer. While Siemens' Kaeser and MHI's Miyanaga had to answer questions from French lawmakers. Pierre Briancon is from Reuters Breakingviews. SOUNDBITE: Pierre Briancon, Reuters Breakingviews, saying (English): "The board of Alstom, which we know prefers the GE bid from the beginning, is more keen on accepting the GE bid, has a binding offer, will pay a break-up fee if the deal isn't done. Alstom is definitely politically astute, they know whom they are talking to, they know one of the decision makers is going to be the government, so they know that. GE is very politically astute as well and they are expected to come up with another improvement of the deal, not financially, but politically." Alstom employs 18,000 people in France - and Paris want to keep as many jobs as it can, given unemployment is stuck above 10%. Alstom said it would review the Siemens MHI proposal. The French government is still negotiating. And in the latest twist, a source in the French president's office urged both parties to improve their offers.

Alstom offers not good enough for France

Tuesday, Jun 17, 2014 - 02:33

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