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Mergers & Acquisitions

France seeks better offers from Alstom suitors

The French government is reportedly unhappy with the bids made for engineering firm Alstom. Media reports say Paris wants Alstom’s three suitors General Electric (GE), Siemens and Mitsubishi to improve their offers.

Paris wants more for Alstom

The government of French Socialist President Francois Hollande wanted the joint bid by Siemens and Mitsubishi Heavy Industries (MHI), as well as the offer by US rival General Electric (GE) to be improved, British news agency Reuters reported Tuesday.

Citing a source in Hollande's office, Reuters reported that the talks were continuing this week and that the French president would expect improved bids in the days leading up to a June 23 deadline imposed by GE for its offer.

US-based engineering giant GE is offering to buy Alstom's energy division for 12.4 billion euros ($16.8 billion). GE management said it was making progress in discussions with the government on its offer, which would include Alstom's thermal and renewable power as well as its grid business.

On Monday, GE's offer was topped by a rival bid jointly put forward by Germany's engineering conglomerate Siemens and Japan's Mitsubishi Heavy Industries (MHI). It values Alstom's power business at a total of 14.2 billion euros. Paris insists that any solution must protect French jobs and strategic influence over the company.

Keeping a French industrial icon

Following talks on Tuesday between Siemens, Mitsubishi and the French government, Siemens Chief Executive Joe Kaeser told a news conference in Paris that he saw no reason to discuss improving an offer which he described as the better one on the table.

"Why would a superior offer be improved if it is superior already? There is no reason for us to discuss that question at this time," he said.

Under the Siemens-MHI deal, Siemens offered to buy Alstom's gas turbines business for 3.9 billion euros in cash, and MHI to buy stakes in Alstom power assets including hydroelectric power equipment and grid, to be held in separate joint ventures. MHI would inject 3.1 billion euros in cash into Alstom and offer to take a stake of up to 10 percent in the French firm from 29 percent shareholder Bouygues.

"We are keeping a proud French icon strong and making it even stronger," Kaeser said, adding that Siemens was also ready to enter into "good faith" talks with Alstom to strengthen both companies' mobility businesses.

Mitsubishi Heavy's Miyanaga told the joint news briefing with Kaeser that it would create around 1,000 new jobs in France with joint research and development, marketing and manufacturing cooperation, and efforts to boost local vocational skills.

An additional 1,000 apprentice training jobs in France were pledged by the Siemens CEO together with a guarantee that existing Alstom worker benefits would not be damaged by the tie-up.

uhe/hg (Reuters, dpa)

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