German engineering heavyweight Siemens has voiced its interest in an asset swap with France's Alstom. The move is meant to counter a potential tie-up between the French firm and General Electric.
While General Electric was reported to be in talks with France's Alstom on buying its power turbines business, Germany's Siemens proposed an asset swap with the French company.
Among Siemens' businesses are high-speed trains, other rolling stock and power station turbines. A deal with Alstom would enhance Siemens power grid business, while the French could see their company become a more significant rail transport player.
But Paris said Monday it would block any deal with Alstom it considered unfit. The French state holds shares in Alstrom. Economy Minster Arnaud Montebourg said ahead of a meeting with French President Francois Hollande and GE CEO Jeff Immelt that job safeguards were of concern. But he stopped short of calling for Alstom's nationalization, if neither GE's offer nor the rival proposal from Siemens proved acceptable.
Keeping the golden mean?
"We're working to improve the offers to make sure that French companies do not become prey," Montebourg told RTL radio. "On the other hand, we're open to alliances that help to equip us for globalization."
Alstom said in a statement its shares would be suspended from trading at the Paris Stock Exchange until no later then Wednesday morning as the company "continued and deepened its strategic reflection" on the future of its business.
Market experts say Alstom need a strong partner one way or another. Suffering from heavy debts and a downturn in orders, the company was bailed out by the French government in 2004 and has been struggling since to increase profitability.
hg / kpc (Reuters, AFP)