As General Electric (GE) tries to close the buyout deal of Alstom estimated at USD$14.5 billion, French officials have advised the power equipment giant to seriously consider rival interest from Germany’s Siemens AG, Bloomberg reports.
French industry minister Arnaud Montebourg has expressed support for a deal with Siemens which would involve an asset swap of some of its rail assets in exchange for Alstom’s energy division, which includes smart grid management solutions.
The deal would make Siemens one of the world’s largest manufacturers of equipment for power plants and electric transmission.
Meanwhile, GE chief executive officer Jeffrey Immelt has met with French President Francois Hollande to argue that its plan – to acquire the energy business while Alstom’s transport unit is separated – would result in fewer job losses thanks to smaller overlaps of operations, said a Bloomberg source.
A press release put out by Alstom this week stated: “Alstom received a binding offer from GE to acquire its energy activities.
“The scope of the transaction includes the thermal power, renewable power and grid sectors, as well as corporate and shared services. With 65,000 employees, these businesses registered €14.8Bn in sales in fiscal year 2012/13.
It added: “The proposed price is a fixed price representing an equity value of €12.35 billion (US$17.12 billion) and an enterprise value of €11.4 billion (US$15.8 billion).”
Under both deals, Alstom would refocus on its transport activities including high-speed train the TGV.
Siemens’s executive and supervisory boards are convening this week to decide whether to bid for Alstom, following a meeting of CEO Joe Kaeser and Chairman Gerhard Cromme with Mr Hollande.
The company hasn’t decided yet on a bid for all or just part of the French company, the news agency reported.
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