France Expects Better GE Offer For Alstom

Posted by Joseph R. Fonseca
Sunday, June 15, 2014
French Finance Minister Michel Sapin


France expects General Electric to boost its bid for Alstom's power unit in response to a potential joint offer from Siemens and Mitsubishi Heavy Industries, Finance Minister Michel Sapin said on Sunday.

Siemens and Mitsubishi are putting the finishing touches on an offer for Alstom's turbine businesses, including a cash element of roughly 9 billion euros ($12.3 billion), according to sources close to the bidders.

That compares with the U.S. conglomerate's existing offer of 12.4 billion euros ($16.9 billion) for all of Alstom's energy assets.

"Mitsubishi forming an alliance with Siemens improves Siemens' offer," Sapin said in an interview broadcast simultaneously on Europe 1 radio and iTele. "I think that GE is also going to improve its offer."

Siemens, which has declined to comment on any discussions with Mitsubishi, has said it plans to disclose a bid for Alstom by Monday. Its supervisory board will meet on Sunday evening, according to a source close to the German group.

GE, meanwhile, has made a pledge to the French government to create 1,000 new jobs in France within three years of a deal, according to sources close to the discussions.


Sapin said he did not have "any preference" for a bidder, but France would defend jobs and investment through a new decree extending the government's powers to block foreign takeovers in sectors deemed strategic.

"We will not decide for (Alstom) but we will use our weight," he said.

Alstom, which is famous for making France's iconic TGV high-speed trains, is a big private-sector employer in the country and was bailed out by the state a decade ago.

In the joint move being considered by Siemens and Mitsubishi, the German company would acquire Alstom's gas turbines business while the Japanese group would inject cash and industrial assets into a joint venture in steam turbines, sources said.

As part of the deal, Mitsubishi and the French government would take equal stakes in Alstom, union representatives said after meeting with Economy Minister Arnaud Montebourg.

Sapin was not asked about a potential government stake in Alstom, but said he did not see a French-only solution for Alstom given the global nature of train and power markets.

"It is natural to develop alternatives, alliances that are international," he said.

(Reporting by Gus Trompiz; Editing by Sophie Hares)

($1 = 0.7345 Euros

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