Siemens and the French government intervened in U.S.-based General Electric’s plan to buy the power arm of France’s Alstom on Sunday by offering an alternative tie-up between European “champions” and a pledge to act in France’s national interest.
Though Alstom is privately owned, France’s firebrand Economy Minister Arnaud Montebourg issued a stark reminder of the influence the government holds over a company that relies heavily on orders from state rail operator SNCF and partly state-owned utility EDF.
“GE and Alstom have their calendar, which is that of shareholders, but the French government has its own, which is that of economic sovereignty,” Montebourg said in a statement.
On the day that GE boss Jeff Immelt had been due in Paris to thrash out a $13 billion deal for struggling Alstom’s power turbines and grid equipment division, Montebourg provided the first official confirmation of the GE offer’s existence.
He said it had been presented to him last week by Alstom Chief Executive Patrick Kron and related to “the purchase of the energy business of Alstom”, which also makes railway rolling stock, as does Germany’s Siemens.
By contrast, Montebourg said that an alternative Siemens proposal made public on Sunday was “about creating two European and global champions in the energy and transport domains – one around Siemens, the other around Alstom”.
Alstom’s board had been due to hold a meeting on Sunday to discuss the GE proposal, which sources said was worth $13 billion, before Siemens entered the fray with the announcement that it had written a letter to “signal its willingness to discuss future strategic opportunities” with the French group.
Siemens gave no further details on the letter and Alstom declined to comment. GE has remained tight-lipped on the subject since last week.
TRAINS PLUS CASH
However, a report on newspaper Le Figaro’s website on Sunday said Siemens was offering Alstom half of its train-making business plus cash in exchange for its French rival’s power turbines division.
Le Figaro said it had seen the letter and that it included a proposal for Alstom to take on Siemens’ high-speed trains and locomotives arm, but not its metropolitan trains division. The paper gave no detail on the cash element of the deal.
A report in Germany’s Handelsblatt outlined a similar scenario. The paper, which also said it had seen the letter, put the value of the proposed deal at 10-11 billion euros ($14-15 billion).
Though Alstom CEO Kron has said in the past he is not keen on creating a Franco-German train manufacturer, the French government has made it clear since the GE offer leaked last week that it wants to find alternatives to the U.S. group’s proposal.
Montebourg said last week that he planned to meet GE boss …continued »