and Mitsubishi to present competing Alstom bid on
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[June 16, 2014] By
Jens Hack and Benjamin Mallet
MUNICH/PARIS (Reuters) -
Germany's Siemens and Japan's Mitsubishi Heavy
Industries (MHI) will present a joint offer for France's
Alstom in Paris on Monday, challenging a General
Electric bid that sparked French government concern
about retaining jobs and industry expertise.
Siemens chief executive Joe Kaeser and Mitsubishi chief executive
Shunichi Miyanaga are due to meet Alstom officials in Paris on
Monday afternoon, a source close to the Japanese firm in France
According to sources close to the bidders, they will propose that
Siemens acquire Alstom's gas turbines business while MHI inject cash
and industrial assets into a joint venture in steam turbines.
Their offer comes shortly ahead of a June 23 deadline set by General
Electric for its 12.4 billion euro ($16.9 billion) bid for all of
Alstom's energy arm, which includes its thermal power, renewable
power and grid businesses.
However the Siemens-Mitsubishi plan, which was discussed by Siemens'
supervisory board late on Sunday, would not be a direct buyout of
Alstom's power assets but instead set up one or several joint
holdings in its power businesses, including in hydroelectric power
equipment and grid.
The deal would comprise a cash element that could reach around 9
billion euros, those same sources said - including a payment of 4
billion by Siemens for the gas turbines business and Mitsubishi's
cash injection in the steam turbines joint venture and payment for a
direct stake in Alstom.
Kaeser and Miyanaga are scheduled to outline the plan to France's
lower house of parliament at 1500 GMT on Tuesday, according to the
parliamentary press office, and are likely to face tough questions
from lawmakers worried about national interests.
French Economy Minister Arnaud Montebourg has actively played up a
potential rival offer from Siemens and MHI as it seeks to pressure
GE into improving its offer with guarantees to create jobs, localize
decision centres in France and secure the nation's nuclear know-how.
The government has already secured a pledge from General Electric to
create 1,000 new jobs in France within three years of a deal, but
Finance Minister Michel Sapin said on Sunday he expected the U.S.
conglomerate to further improve its offer.
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The government is advocating "alliances" that would preserve Alstom
as a player in both transport and energy. It sees both sectors as
strategic to France and is keen to preserve jobs at a time when
unemployment is stuck above 10 percent and a growing chunk of voters
are turning towards the far-right.
It has also actively lobbied for Siemens to combine its rail
activities with those of Alstom - known for the high-speed TGV
trains - saying it would create a European rail champion.
But Alstom has not shown interest in a transport deal, and according
to sources close to the talks, Siemens is now expected to propose
this only at a later stage in the negotiations, as something
entirely separate from any turbines deal.
($1 = 0.7345 Euros)
(Writing by Maria Sheahan and Natalie Huet; Editing by Sophie
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