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Siemens, Mitsubishi move for Alstom
- 9 years ago (2014-06-17)
- Junior Isles
Siemens of Germany and Mitsubishi Heavy Industries of Japan have jointly offered to buy parts of France engineering company Alstom in a move that could trump a competing bid by General Electric.
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Siemens AG said it is offering €3.9 billion ($5.3 billion) to acquire Alstom’s gas turbine business entirely, including related service contracts. Siemens is also offering to negotiate another deal to combine its rail business with Alstom's larger rail unit to create what Siemens dubbed a “European rail champion for the world market”.
The combined offer reportedly values Alstom’s power equipment business at more than €13.35 billion.
At the same time, Mitsubishi is offering to pay €3.1 billion in cash to take minority stakes in Alstom’s divisions that make equipment for nuclear, fossil, hydroelectric and wind power plants, as well as its power grids division. Alstom would retain control of those businesses.
Mitsubishi is also offering to buy a 10 per cent stake in the Alstom group from shares now held by French conglomerate Bouygues, which owns 29.3 per cent of Alstom.
GE has already offered $17 billion for Alstom’s power generation business but the French government is keen to have other potential companies make more appealing offers.
The government is determined to protect jobs, secure energy independence and keep 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 turbine service business in France.