Siemens, Mitsubishi join forces to woo Alstom
The battle for Alstom`s energy assets today intensified with Germany`s Siemens joining forces with Japan`s Mitsubishi to draw up a bid for the French `national jewel`.
Frankfurt: The battle for Alstom`s energy assets today intensified with Germany`s Siemens joining forces with Japan`s Mitsubishi to draw up a bid for the French `national jewel`.
The announcement by the German-Japanese giants however failed to gain traction with the French group, with a source close to Alstom saying it would effectively mean the company`s break-up.
Siemens had been going head to head against GE for Alstom`s energy assets.
But today, the German giant and Mitsubishi Heavy Industries announced that they have "joined forces in evaluating a potential proposal for certain assets of the French multinational conglomerate Alstom in order to strengthen the future position of Alstom, MHI and Siemens."
They added that they would make a decision on whether to submit an offer by June 16.
According to a source close Alstom, Siemens and Mitsubishi are planning to propose to form two entities following the takeover -- one comprising of Siemens and part of the Alstom assets and the other made up of Mitsubishi and the remainder of Alstom`s energy assets.
Another source closed to the French group however said Alstom "is sceptical and shocked" by the planned bid.
"It would be a dismantling" of the group, the source said, adding that it "is not a solution for (Alstom`s) problems".
The company considers that it does not have the economies of scale in the energy business as it is too small on the world market for power-generating turbines. It is also battling a European slump in energy demand.
Alstom favours GE`s bid, although it has said it would treat any offer by Siemens fairly.
However, GE`s USD 17 billion bid has run into political opposition in France.
The French government views Alstom as a firm of national strategic importance and is concerned about safeguarding jobs as it battles record unemployment and declining industrial competitiveness.
Alstom is one of France`s biggest private sector employers with about 18,000 staff nationwide.
Seeking to allay any fears about possible layoffs arising from a deal, GE promised late May to create 1,000 jobs in France.