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Thursday 21 August 2014

Siemens/Mitsubishi bid €14bn for Alstom

Francois de Beaupuy and Alex Webb

Published 18/06/2014 | 02:30

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Shunichi Miyanaga, CEO of Mitsubishi Heavy Industries Ltd.
Shunichi Miyanaga, CEO of Mitsubishi Heavy Industries Ltd.

Siemens said its joint bid with Mitsubishi Heavy Industries for Alstom's energy operations trumps a competing offer from General Electric (GE), as the German manufacturer tries to win the backing of the board and the French state.

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The Siemens-Mitsubishi offer values Alstom's energy assets at €14.2bn, compared with GE's €12.35bn valuation for those operations, Siemens said in a presentation in Paris.

The German-Japanese proposal opens the race for the French manufacturer and puts pressure on GE to sweeten its offer for Alstom's energy assets.

GE chief executive Jeffrey Immelt unveiled his bid seven weeks ago as he tries to build a bridgehead in Europe and win business away from Munich-based Siemens, the region's biggest engineering company.

Siemens CEO Joe Kaeser made a counter offer yesterday, seeking to carve up the French manufacturer's energy and transportation assets with Mitsubishi Heavy Industries and Hitachi.

Siemens is offering €3.9bn for Alstom's gas turbines, while Japan's Mitsubishi Heavy and partner Hitachi would pay €3.1bn for stakes in the steam-turbine, power-grid and hydro businesses. Mitsubishi also offered to buy as much as 10pc of Alstom, a stake valued at about €900m.

The German manufacturer would also be willing to combine its entire rail business with Alstom's to create a new leading European company in that market, Siemens chairman Gerhard Cromme said in Paris yesterday, after he, Mr Kaeser and Mitsubishi Heavy CEO Shunichi Miyanaga met with French president Francois Hollande.

Siemens shares rose 0.1pc in Frankfurt while Alstom dropped 1.8pc in Paris.

While Alstom helped broker the GE plan and has supported the US company, Siemens has sought to play up its appeal with governments in France and Germany that are keen to back the creation of leading European companies in fields such as energy and transportation.

GE won't engage in a bidding war for Alstom, spokeswoman Deirdre Latour said yesterday. GE previously has said it's flexible on the terms of its bid, signaling a willingness to make concessions in negotiations with the French government.

Irish Independent

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