US and German rivals in bidding war for Alstom
Published: 20 Jun 2014 09:18 GMT+02:00
The battle for French group Alstom heated up on Friday, as Siemens-Mitsubishi and General Electric sweetened their rival bids to win over the government and tie-up with the firm's main power-generation division.
French President Francois Hollande was due to meet his prime minister and energy and economy ministers on Friday before receiving the firms' chiefs separately to hear their respective cases.
Alstom, which also makes high-speed trains, said it would mull the competing bids in a meeting sometime before Monday which marks the final day of the current GE offer.
The future of Alstom has been at the centre of a trans-Atlantic tug of war for several months after Hollande's Socialist government objected to the US giant buying the jewel of French engineering, and encouraged a rival offer by Germany's Siemens, which then teamed up with Japan's Mitsubishi.
Early on Friday, Siemens and Mitsubishi improved and simplified their linked offers, increasing their valuation of Alstom's energy division to €14.6 billion less than a day after GE had made several changes to make its €12.35-billion ($17 billion) bid more attractive.
The Siemens-Mitsubishi offer increased the valuation of Alstom's energy division, representing 70 percent of the French group, by €400 million to €14.6 billion and upped the cash contribution by €1.2 billion to €8.2
billion, the groups said in a statement.
It also simplified the implementation of the transaction, following analysts' comments that the initial Siemens-Mitsubishi offer unveiled late on Monday was too complex and would break up Alstom.
"The specified proposal continues to preserve Alstom's current perimeter in almost all its activities, enhances its industrial sustainability, strengthens its financial structure," the companies said in a statement.
GE for its part on Thursday made several changes to make its bid more attractive, including a government veto over sensitive nuclear energy technology and strengthening the French company's transportation business.
"France will have one of the most complete energy capabilities of any country in the world and certainly in Europe," GE chief executive Jeff Immelt told journalists on Thursday in Paris.
Key issue for Hollande
The beleaguered Alstom, which feels that its energy businesses - which range from wind power to turbines for nuclear reactors - is not large enough to compete globally, originally approached GE.
When Hollande's government learned of the advanced talks to sell the power business, it objected on the grounds that jobs and decision-making could be lost and encouraged Germany's Siemens to make a counter offer, hoping that a Siemens-Alstom tie-up would create a global-scale European group.
Siemens then linked up with Mitsubishi Heavy Industry (MHI) to present a rival offer.
Alstom, which employs 18,000 people in France out of a total 90,000 worldwide, is an important issue for the French president, who is battling to reduce a huge trade deficit, record unemployment and whose approval ratings have dropped to record lows.