Engineering giants Siemens of Germany and Mitsubishi Heavy Industries of
Japan on Monday jointly offered to buy parts of France's Alstom and
start a long-term partnership, a move that could derail a competing bid
by General Electric.
Siemens AG said it is offering 3.9 billion euros ($5.3 billion) to
acquire Alstom's gas business entirely, including related service
contracts. Mitsubishi would purchase a 10 percent stake of Alstom and
inject 3.1 billion euros into the company.
Struggling Alstom already has a $17 billion offer on the table from
General Electric Co. for its energy operations, but the French
government has been cool to the idea of a buyout of a company that
pioneered TGV high-speed trains, later exporting them around the world,
and which builds nuclear turbines.
Siemens and Mitsubishi promised their proposal would "preserve Alstom's
current perimeter in almost all its activities, enhance its industrial
sustainability, strengthen its position as a diversified global player
in energy and transport, and strengthen its financial structure, while
remaining a major French listed group."
Alstom said in a statement the chiefs of Siemens and Mitsubishi outlined
the proposal for Alstom's energy activities in a meeting Monday with
Alstom CEO Patrick Kron and Jean-Martin Folz, who heads a committee
evaluating the offers.
French President Francois Hollande, who has said GE's offer is not good
enough, is to meet with the Siemens and Mitsubishi CEOs on Tuesday to
discuss their proposal. While the French government finds GE appealing
because of its long presence in France, it has tried to get other
potential suitors for a company considered strategic because of its
footprint on the energy and transport sectors.
A ranking French official said in April the French priority in all
matters is jobs, energy independence and keeping companies on French
soil.
In addition to the cash transaction, Siemens said it would offer job
guarantees for three years in France and Germany for the transferred
business, and would establish its European headquarters for the combined
gas service business in France.
Siemens also indicated that, following the closing of the deal, it would
eventually "be prepared to become a long-term anchor shareholder in a
combined transport business."
Siemens has 359,000 employees worldwide and makes everything from gas-
and wind-powered turbines to trains, medical imaging devices, factory
machines and security equipment.
Mitsubishi Heavy is Japan's largest heavy machinery maker with $32
billion in annual revenue. It produces ships, engines, nuclear power
plants and arms for Japan's defense ministry.
Meanwhile, GE began an ad campaign — "Tomorrow will be Made in France" —
in a bid to address concerns that the country could lose a strategic
company with its offer. The full-page ad in French newspapers refers
repeatedly to "our alliance" and says besides the 1,000 new jobs to be
created as part of the offer "thousands of indirect jobs" would be
generated.
Alstom is to make a decision about where its future lies in a week.
(AP)