Siemens And France Weigh In As GE Eyes Alstom Deal - Update

Posted by Joseph R. Fonseca
Sunday, April 27, 2014

Siemens and the French government intervened in General Electric's plan to buy the power arm of Alstom on Sunday with an alternative European "champions" tie-up proposal and a pledge to act inFrance's national interest.

Though French trains-to-turbines maker Alstom is privately owned, 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, providing the first official confirmation of GE's offer.

GE boss Jeff Immelt was in Paris on Sunday to thrash out a $13 billion deal for struggling Alstom's power turbines and grid equipment. Montebourg had planned to meet him but the encounter was postponed until later in the week after the minister advertised an alternative proposal by German rival Siemens.

The Siemens proposal would create "two European and global champions in the energy and transport domains - one around Siemens, the other around Alstom", Montebourg said.

Montebourg said the government would not accept any hastily made decision, that it would seek to preserve France's jobs and industrial base and would in particular be "extremely vigilant" in ensuring the nation's nuclear industry remains independent.

The warning compels Alstom and GE to tread carefully. However, sources familiar with the talks said these were very advanced.

"Alstom has received a firm offer from GE and an expression of interest from Siemens. It's not at all the same kind of commitment," one of the sources said.

TRAINS PLUS CASH

Earlier in the day, Siemens entered the fray with an 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.

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 Siemens was proposing that Alstom take on the Siemens high-speed trains and locomotives arm, but not its metropolitan trains division. A report in Germany's Handelsblatt outlined a similar scenario and put the value of the proposed deal at 10-11 billion euros ($14-15 billion).

Alstom CEO Patrick Kron has said in the past he is against creating a Franco-German train manufacturer.

As well as the power turbines arm GE wants to buy, Alstom makes TGV high-speed trains and is one of France's top private-sector employers.

Though Alstom is struggling with heavy debt and weak demand, political sensitivities run deep in France.

Marine Le Pen, leader of the far-right National Front (FN) party that won widespread support in last month's local elections, said the government had "abandoned Alstom to be dismantled for American or German profit".

A Siemens tie-up may be no more palatable to some than a deal with GE. A decade ago, Alstom was rescued by a state-backed restructuring when Kron and France's then-president, Nicolas Sarkozy, both balked at the prospect of a Siemens acquisition.

OVERLAP

A deal to sell Alstom's power assets, which account for about 70 percent of total group revenue, would effectively break up the engineering group and leave Alstomas a pure transport business, building its TGV trains, other rolling stock and rail signaling equipment.

A

Alstom and Siemens are direct rivals in steam turbines, offshore wind power, hydro power and grid. For its part, GE is absent from offshore wind and hydro power and could use the boost in steam turbines and grid.

Sources have said a deal with GE is backed by Alstom's main shareholder, French conglomerate Bouygues, which holds a 29 percent stake.

Before the news of an approach from GE, Alstom shares had slumped 20 percent in 12 months on concerns over its cash flow, prompting Bouygues to take a $1.9 billion writedown on its stake in February. Trading of Alstom shares was suspended on Friday at the request of market regulator AMF.

(Additional reporting by Andrew Callus, Matthieu Protard and Natalie Huet in Paris, Anjuli Davies in London and Soyoung Kim in New York; Editing by David Goodman and Gareth Jones)

($1 = 0.7227 Euros)

Maritime Today


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

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

Legal

ECDIS Related Detentions on the Rise

ClassNK has been informed by Australian Maritime Safety Authority (AMSA) that during PSC inspections it has been increasingly reported that vessels have been detained

CMA CGM Crosses 90% Ownership Threshold in NOL

Container shipper CMA CGM S.A. has crossed the 90 percent ownership threshold in Neptune Orient Lines Limited (NOL), enabling it to bring the Singapore company private.

UAE Top Court: Physical Bunkers Suppliers Have No Right to Recourse against Owners/Charterers

The OW saga - UAE Federal Supreme Court decides that physical suppliers of bunkers have no right to recourse against Owners/Charterers. In the first decision

Finance

Baltic Index Rises for Fifth Consecutive Session

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Tuesday for a fifth straight session on stronger demand across all vessel segments.

Singapore Exchange, Baltic Exchange Continue Transaction Talks

Singapore Exchange (SGX) has agreed with the Baltic Exchange Limited (Baltic Exchange) to extend the period of exclusive discussions regarding a cash offer for

Hanjin to Return 38 Vessels Next Year

Hanjin Shipping is planning to return a total of 38 chartered vessels once their contracts end as part of its restructuring efforts, reports the Korea Herald. A

Energy

Gas Plant Fire Halts US Gulf Coast Platforms

At least two offshore oil platforms halted operations on Tuesday in the U.S. Gulf of Mexico after a fire at a natural gas processing plant in Mississippi shut a

China's Robust Crude Oil Imports Mask Changing Fuel Dynamics

China is a bigger concern for crude oil and products markets than the current worries about the British vote to leave the European Union.   While the news media

EU to Accept Antitrust Offer from Maersk, MSC, 13 Others

World No.1 container liner Maersk, Swiss peer MSC and 13 other shipping firms are set to escape possible penalties as EU antitrust regulators plan to accept their offer to end a five-year probe,

News

Fundraiser Held for USS Gerald R. Ford Crew

Blackmer, a company in positive displacement and centrifugal pump and reciprocating compressor technologies, has a relationship with the U.S. Military that dates

Gas Plant Fire Halts US Gulf Coast Platforms

At least two offshore oil platforms halted operations on Tuesday in the U.S. Gulf of Mexico after a fire at a natural gas processing plant in Mississippi shut a

Meercat Workboats Scores a Hat-trick

The U.K.’s Meercat Workboats says it scored a hat-trick; the Hampshire-based boat builder announced it is moving premises, that Seawork was a huge success and that

 
 
Maritime Contracts Maritime Security Navigation Pipelines Pod Propulsion Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction 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: 0.1065 sec (9 req/sec)