Siemens, Mitsubishi Challenge GE with Alstom Offer

Posted by Eric Haun
Monday, June 16, 2014

Germany's Siemens and Japan's Mitsubishi Heavy Industries presented a joint offer to France's Alstom on Monday that included 7 billion euros ($9.5 billion) in cash, challenging a bid by General Electric.

Under the deal, Siemens offered to buy Alstom's gas turbines business for 3.9 billion euros in cash, and MHI to buy stakes in Alstom power assets including hydroelectric power equipment and grid, to be held in separate joint ventures.

MHI would inject 3.1 billion euros in cash into Alstom and offer to take a stake of up to 10 percent in the French firm from shareholder Bouygues.

"Alstom would remain an independent energy and transport player with a strong brand," Siemens Chief Executive Joe Kaeser said. "Its energy business would be strengthened through the partner MHI and we intend to explore opportunities with Alstom to create a European rail champion for the world market."

Alstom said it would review the proposal in the coming days.

Sources familiar with the matter said the offer would be worth over 1 billion euros more than GE's, taking into account the value of the parts of the power businesses that would remain under Alstom's control.

Mitsubishi would like to buy the Alstom stake alongside the French government but would not walk away from the deal if Bouygues was unwilling to sell, the sources said, adding that Bouygues would be contacted very soon.

GE said it had made progress in its discussions with the French government on its offer for Alstom's energy business, which included "proposing alliances in energy and transport". A spokesman said GE would not however be drawn into a bidding war.

The race to acquire power activities from the French train and turbine maker has entered a crucial week, ahead of a June 23 deadline set by GE for its 12.4 billion euro bid for all of Alstom's energy arm, which includes its thermal power, renewable power and grid businesses.

The French government has criticized GE's proposal and gave itself powers to veto a deal on the grounds it does not want Alstom, an innovator and big employer, to sell the bulk of its business to a foreign firm without the state having a say.

The government has also tried to negotiate better offers and alliances to preserve Alstom as a player in both transport and energy, seeing both as vital national industries at a time when unemployment is stuck above 10 percent and voters are increasingly turning towards the far-right.

French Finance Minister Michel Sapin said Alstom and the government would examine both offers once they are on the table and base their decision on that.

Alstom, best known overseas for making TGV high-speed trains, employs 18,000 people in France, around a fifth of its workforce. It was rescued from near bankruptcy by the state a decade ago and has since largely relied on public orders for power and rail equipment.

Leverage
A rival offer gives France more leverage against GE as it seeks more job guarantees and a promise to keep major offices in France to secure the nation's energy independence. Alstom is a supplier of turbines for nuclear plants worldwide, and Paris fears that having these fall under U.S. control could jeopardise exports in the atomic power industry.

However, it is far from certain whether the government, Alstom and its top shareholder Bouygues would genuinely support a Siemens-Mitsubishi offer over that of GE.

Bouygues said it had not yet been approached by Mitsubishi or the government about its 29 percent Alstom stake, but it would support whichever proposal was favoured by Alstom's board.

Siemens CEO Kaeser and MHI's chief Shunichi Miyanaga will present their plan to France's lower house of parliament at 1500 GMT on Tuesday, and are likely to face tough questions from lawmakers worried about national interests.

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 Sapin said on Sunday he expected the U.S. conglomerate to further improve its offer.

Siemens followed suit, saying on Monday it would offer a three-year job guarantee for workers at the gas business in France and Germany and said the alliance between Alstom and MHI would create more than 1,000 jobs in France.

GE is ramping up its charm offensive in the French press with ads saying its proposed "alliance" with Alstom would create a global energy leader based in France while strengthening Alstom's transport business.

"Tomorrow is made in France," the ads read, below a drawing of a plane - a hint at the jet engines GE makes via the U.S.-French venture CFM - flying over a field of wind turbines.

GE Chief Executive Jeff Immelt told French lawmakers last month his group would set up global headquarters for the grid, hydro, offshore wind and steam turbines businesses in France. GE is also considering a tie-up in rail signalling that would give Alstom control of that business, he said.

The government is worried that Alstom would be too weak once reduced to its smaller transport arm, and has played up an alternative tie-up with Siemens, which also makes trains, as an opportunity to create a European rail champion.

But Alstom has not shown interest in Siemens's rolling stock, and Siemens, while saying it would discuss the possibility of combining transport operations, made no promises that a deal would happen.

"Siemens intends to discuss diligently and in good faith solutions which create a strong European champion with global reach and sustainable business strategies going forward in the fields of mobility in the best interest of all parties involved," it said.

($1 = 0.7345 Euros)

(By Jens Hack and Natalie Huet; Additional reporting by Elizabeth Pineau, Benjamin Mallet, Matthieu Protard and Ingrid Melander in Paris; Writing by Maria Sheahan and Natalie Huet; Editing by Sophie Walker and Giles Elgood)

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Coast Guard Foundation to Honor USCG in Miami

The Coast Guard Foundation, a nonprofit organization committed to the education and welfare of all Coast Guard members and their families, announced today that

Maritime Broadband Opens Office in Greece

Maritime Broadband has expanded its worldwide footprint by opening an office, Maritime Broadband Hellas, in Athens, Greece. The new office addresses the growing

Renewable Energy: Schottel Tidal Turbines Ready For Use

In the last months Schottel  successfully tested its hydrokinetic turbines in Strangford Lough, Northern Ireland. The full-scale tests included 260 operating hours under realistic conditions.

Finance

Weak Oil Threatens US Export of LNG

Plunging global oil prices may turn hopes for cheap liquefied natural gas supplies from the United States into a costly disappointment for Asian buyers who have

Continership Alliance Expands to US Trades

The CKYHE Alliance (COSCO, "K" LINE, Yang Ming, Hanjin Shipping, and Evergreen Line) has announced they will expand their cooperation scope to U.S. Trades and CKYHE

Total CEO Killed in Moscow Runway Accident

Private jet collided with snow plow during takeoff; Total's CEO a defender of Moscow policies. Insiders Boisseau and Pouyanne long seen as potential successors.

Energy

PES to Begin Operating Benzene Terminal in November

Philadelphia Energy Solutions plans to start operating a new benzene offtake terminal next month at its 335,000-barrel-per-day refinery in Philadelphia, two people familiar with the plans said.

Weak Oil Threatens US Export of LNG

Plunging global oil prices may turn hopes for cheap liquefied natural gas supplies from the United States into a costly disappointment for Asian buyers who have

Renewable Energy: Schottel Tidal Turbines Ready For Use

In the last months Schottel  successfully tested its hydrokinetic turbines in Strangford Lough, Northern Ireland. The full-scale tests included 260 operating hours under realistic conditions.

Marine Power

B COOL Acquires MEMAC

With the acquisition of MEMAC, B COOL A/S now offers customers one entry to multiple maritime systems – both refrigeration solutions and monitoring of the engine

Singapore’s MPA Discuss LNG Bunkering

The Maritime and Port Authority of Singapore (MPA), Antwerp Port Authority, Port of Rotterdam and Port of Zeebrugge participated in a Liquefied Natural Gas (LNG)

Mitsubishi Super Skiving System

Mitsubishi Heavy Industries, Ltd. (MHI) has completed development of the "Mitsubishi Super Skiving System" for machining internal gears with high speed and outstanding precision.

News

PES to Begin Operating Benzene Terminal in November

Philadelphia Energy Solutions plans to start operating a new benzene offtake terminal next month at its 335,000-barrel-per-day refinery in Philadelphia, two people familiar with the plans said.

Coast Guard Foundation to Honor USCG in Miami

The Coast Guard Foundation, a nonprofit organization committed to the education and welfare of all Coast Guard members and their families, announced today that

Sunken Barge Salvage Stops Traffic on Chicago River

The U.S. Coast Guard said it is restricting vessel traffic on the Chicago River to allow for salvage of a sunken barge. All cargo has been removed from the sunken

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Offshore Oil Pipelines Salvage Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1654 sec (6 req/sec)