New York and Paris - General Electric (GE) planned another round of lobbying meetings with French officials on its $17 billion (R182.4bn) offer for Alstom’s energy assets as Siemens weighed a bid with Mitsubishi Heavy Industries, an official familiar with the matter said yesterday.
Steve Bolze, the chief executive of GE’s power and water unit, and John Flannery, the lead negotiator, were are in France for discussions this week and next, said the official, who asked not to be identified as the details were private.
GE’s strategy had not changed after Siemens disclosed talks with Mitsubishi on Wednesday, the official said.
Siemens and Mitsubishi would decide whether to submit a proposal to Alstom’s board of directors by Monday. One option being considered was for Mitsubishi to buy Alstom’s steam turbine and grid business and Munich-based Siemens to get the gas turbine operations, officials familiar with the matter said.
GE saw its Alstom offer as more in line with the desires of the French government, which had expressed a preference for a so-called European solution, said the official familiar with GE’s plans. Fairfield, Connecticut-based GE has pledged to create 1 000 new local jobs through its acquisition.
The French government was examining all bids with a view to getting improved offers, and had no preference between the proposals at this stage, a government official said yesterday. Ministers will convene next week to discuss the matter.
“We continue to have constructive discussions about the details of our proposed alliance with Alstom and remain confident,” GE said in a statement to Bloomberg News when asked for comment about the Siemens-Mitsubishi discussions.
French President François Hollande yesterday met Prime Minister Manuel Valls, Industry Minister Arnaud Montebourg and David Azema, the head of the agency that manages the government’s stakes in companies, to discuss the bidding for Alstom, a government official said, noting that France did not favour one proposal over the other.
GE and Siemens are vying for the government’s backing as French leaders seek guarantees on jobs and the country’s energy independence. GE has made a binding bid to acquire the energy business of Alstom, which is based near Paris and makes turbines and power transmission equipment.
A Siemens-Mitsubishi offer would have to be “pretty enticing” to sway Alstom’s board and the government, said Daniel Holland, an analyst with Morningstar in Chicago.
“I’m not really convinced yet that splitting up the assets between Siemens and Mitsubishi is really what the company was looking for,” said Holland, who rates GE, Siemens and Alstom as hold. “It’s a development worth paying attention to because it means that Siemens isn’t going away.”
Alstom rose 0.8 percent in Paris trading as of 1.33pm yesterday while Siemens was little changed in Frankfurt. GE fell 1 percent in New York on Wednesday, while Mitsubishi Heavy rose 1.3 percent in Tokyo yesterday.
Siemens had proposed swapping its train making business for Alstom’s energy assets to create two leading European firms in rail and energy. Mitsubishi’s role as part of a Siemens offer could potentially boost the valuation of the German company’s bid and resolve antitrust issues, two officials familiar with Siemens’s plans said. – Bloomberg