Reuters :
Siemens and Mitsubishi Heavy Industries added a billion euros to their offer for Alstom’s energy business on Friday, hoping to see off a revamped bid by General Electric ahead of Monday’s deadline for a decision on the struggling company’s fate.
President Francois Holland, whose government has said it will veto any deal that does not protect jobs and industrial know-how, consulted ministers on the proposals and is due to sit down again with the U.S. and German firms’ bosses – talks that could seal the fate of the 86-year-old firm at the center of one of Europe’s fiercest industrial battles in years.
The government is expected to announce its preference ahead of a decisive Alstom (ALSO.PA) board meeting due by June 23.
GE (GE.N) radically overhauled its bid on Thursday, hoping to appease unions and politicians by transforming what had been largely a straight purchase into an offer of joint ventures similar to that of Siemens-MHI.
In response Siemens (SIEGn.DE) and Mitsubishi Heavy Industries (MHI) (7011.T) simplified the structure of their offer on Friday and raised its cash component by 1.2 billion euros ($1.64 billion) to 8.2 billion.
That values Alstom’s power businesses at 14.6 billion euros, Siemens said, 400 million more than previously and still well above GE’s 12.4 billion.
GE’s cash component in its revamped offer has fallen to an as yet unspecified level since it said it would sell its rail signaling unit to Alstom and set up 50/50 joint ventures in grid, nuclear and renewable assets. Under this proposal GE would still end up with the lucrative gas turbines that account for roughly a third of Alstom’s power business.
Siemens said its offer was “superior industrially, financially and socially,” and reaffirmed pledges to create new jobs in France, a commitment GE has also made.
The new Siemens-MHI proposal still foresees Siemens buying Alstom’s gas turbine arm. But MHI is now offering to buy a 40 percent stake in its combined steam, grid and hydro businesses and bundle them into a single holding company rather than three joint ventures, a plan Alstom sources had said was too unwieldy.
Siemens CEO Joe Kaeser told journalists the two partners were open to the French government taking a stake in Alstom if their bid succeeded, but noted such an option had not yet been discussed. Speculation has focused on whether France’s Bouygues (BOUY.PA) might sell its 29 percent stake.
The nuclear alliance proposed by GE would see the government hold a preferred share, giving it a veto and other rights over issues related to security and technology of nuclear plants – a vital point in France, which relies heavily on nuclear energy.
Alstom reaffirmed that its board would meet no later than Monday to review the offers and that it planned to make no further statement in the meantime.
Paris-based investment house Aurel BGC said it was becoming harder to assess which of the two bids made most sense.
“The government can at least say it has succeeded in upping the stakes but the proposals are becoming complex and more and more difficult to assess,” it wrote in advice to investors.
