Alstom Accepts 10 Bln Euro GE Bid For Its Energy Unit

Posted by Joseph R. Fonseca
Tuesday, April 29, 2014
Brand

 

The board of Alstom accepted General Electric's 10 billion euro ($13.82 billion) bid for its energy unit on Tuesday, several sources familiar with the situation told Reuters.

Sources said GE is not in exclusive talks with Alstom. The French transport-to-turbines group is also set to receive an offer from its much larger German competitor Siemens AG , which said it had sent a letter to Alstom after its managing and supervisory boards had decided to make an offer.

Alstom is expected to make a statement about the two offers early on Wednesday, before its shares, suspended since late last week, resume trading.

The rival bids have triggered a fierce national debate about the fate of power turbine and train manufacturing in France - both integral to the country's engineering pedigree. The French government has said it favours the Siemens offer, which via an asset swap would create two European sector champions: Siemens in electricity and Alstom in trains.

"Alstom's board has accepted the GE offer, it will be examined by an independent committee," one source close to the talks told Reuters.

"The two groups will not enter into exclusive negotiations. This means Alstom cannot go and look for other offers, but there is nothing to stop it from examining offers it receives without soliciting them," the source added.

Earlier on Tuesday, Germany's Siemens said it would make an offer to Alstom if given four weeks to examine its books and draw up a detailed plan to rival a move by GE.

"The prerequisite is that Alstom agrees to give Siemens access to the company's data room and permission to interview the management during a period of four weeks, to enable Siemens to carry out a suitable due diligence," Siemens said.

It gave no further details of its plans, but at the weekend Siemens approached Alstom with a proposal to exchange part of its train business plus cash for Alstom's power arm. In a short letter, it had outlined its proposal worth $14.5 billion.

FRENCH CONCERNS

In a letter to French President Francois Hollande, published by financial daily Les Echos and authenticated by GE, GE Chief Executive Jeffrey Immelt responded to several of the French government's key concerns about the U.S.-based firm's offer.

Immelt said that if GE were to buy Alstom's energy unit, it would boost employment in France and locate global headquarters for several key businesses in the country, including for grids, hydro power, offshore wind and steam turbines.

GE would also work with the French government, utility EDF and nuclear groupAreva to protect France's strategic nuclear sector and its exports and would be willing to sell Alstom's wind turbine activities to French investors.

GE also offered France a representative for its board, and offered to look into the possibility of a transportation joint-venture with the remaining transport activities of Alstom, which are widely considered to be too small to survive independently.

DEFENSIVE MOVE

France's Socialist government has declared that it must have a say in the outcome of the bidding war, as thousands of jobs are at stake and state-owned utility EDF and the national railways are major clients of Alstom.

"There aren't only financial interests at stake in this matter; there are also industrial, social and human interests," Economy Minister Arnaud Montebourg said after a meeting with unions. "The government does indeed intend to defend our country's interests."

Alstom CEO Patrick Kron informed Montebourg of GE's interest last week.

Just over a week before Siemens boss Joe Kaeser presents his future vision for the Munich-based conglomerate, investors in Siemens were sceptical about a potential deal.

"We would have preferred a less risky strategy of organic growth," said Tim Albrecht, fund manager at DWS Investment.

A fund manager who declined to be named said: "Until last week, Alstom was seen as dead, and its products were not thought to be competitive."

He said a purchase would be a 180-degree turn and Siemens would need very good arguments to justify it strategically.

Some investors may also be wary of a French-German deal, given problems with previous cross-border tie-ups, such as defence and aerospace company EADS and drugmaker Aventis, which have both been plagued by battles for control.

Many analysts and investors said they believed the Siemens move was primarily defensive.

Rob Virdee, analyst at Espirito Santo Investment Bank, said the offer looked like a move to stop GE's expansion in Europe.

Industry veterans say Alstom and Siemens have very different corporate cultures, and have competed aggressively against one another for decades.

An industry insider told Reuters that no one at Alstom wants a deal with Siemens because everyone, from the low-level worker to Kron, recalls how Siemens lobbied aggressively against state aid for Alstom when it almost went belly-up in 2004.

Siemens shares closed up 0.6 percent compared with a 1.5 percent rise in shares on the blue-chip DAX index. 

(Additional reporting by Arno Schuetze and Sabine Wollrab in Frankfurt, Irene Preisinger in Munich, Benjamin Mallet, Mark John, Geert De Clercq and Gregory Blachier in Paris, Lewis Krauskopf in New York, and Sophie Sassard in London; Writing by Andrew Callus, Mark John, Madeline Chambers and Geert De Clercq; editing by Will Waterman and David Gregorio)

($1 = 0.7237 Euro)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

Great Lakes Inks M.E., N.C. Coastal Protection Project Deals

Great Lakes Announces $55 Million in Subcontract Work in the Middle East and Award of $38 Million for a Domestic Coastal Protection Project Great Lakes Dredge

Olympic Subsea Vessel Bags Contract

Olympic Shipping has secured a contract for Olympic Delta, an inspection, maintenance and repair (IMR) vessel, with an international client  to work on a renewable energy project.

Asia Tankers-VLCCs Rates Ease as Tanker Jams Fade

Port congestion eases at Basra and Chinese ports; tanker demand set to expand on lower oil prices. Freight rates for very large crude carriers (VLCCs), hurt by slower-than-usual release of cargo,

Finance

ExxonMobil 1Q Profits Plunge 63%

Highlights   * Earnings of $1.8 billion decreased 63 percent from the first quarter of 2015.   * Earnings per share were $0.43 assuming dilution.   * Cash

Shipping, Key Ingredient of EU’s Africa Agenda

The African economy has become one of the most promising global growth markets. Shipping is taking care of the largest part of international trade and in Africa

Ocean Economy Set to Double in Size by 2030

The world’s oceans must be managed well to ensure the potential of an “ocean economy” that was worth US $ 1.5 trillion in 2010.   "Calculations based on the

Energy

Blacklisted Tanker Returns to Libya's Zawiya Port

A tanker that Libya's rival eastern government had been using to try to export oil in defiance of the Western-backed administration in Tripoli returned to the country on Saturday,

Lerwick Harbor sees Seasonal Boost

The opening of the offshore season in northern waters has seen specialist oil industry vessels return to Lerwick Harbor during April to support subsea development projects.

Cory Brothers Opens in Amsterdam Port

Cory Brothers Shipping Agency is delighted to announce the opening of Cory Brothers (The Netherlands) BV, in the port of Amsterdam, servicing the ARA range. The

News

Blacklisted Tanker Returns to Libya's Zawiya Port

A tanker that Libya's rival eastern government had been using to try to export oil in defiance of the Western-backed administration in Tripoli returned to the country on Saturday,

Lerwick Harbor sees Seasonal Boost

The opening of the offshore season in northern waters has seen specialist oil industry vessels return to Lerwick Harbor during April to support subsea development projects.

Cory Brothers Opens in Amsterdam Port

Cory Brothers Shipping Agency is delighted to announce the opening of Cory Brothers (The Netherlands) BV, in the port of Amsterdam, servicing the ARA range. The

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Pipelines Pod Propulsion Port Authority Ship Electronics Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1888 sec (5 req/sec)