GE revises Alstom bid
June 19, 2014
General Electric's revised bid offered $17 billion (12.48 billion euros) in cash for Alstom's power business and provided new guarantees on jobs and decision-making structures, the US-based company said in a statement released Thursday.
While leaving the overall value of the deal unchanged, GE Chief Executive Jeff Immelt said in a statement the revised offer would create jobs, establish headquarters in France and ensure that the Alstom name would endure.
GE's original offer was for a buy-out of the entire power division of Alstom. Now the firm proposes to set up three joint ventures. One for the power grid businesses, another for the offshore wind and hydro-power operations, and a third for nuclear steam turbines.
GE's new offer comes after Germany's engineering giant Siemens and Japan's Mitsubishi Heavy Industries (MHI) presented a rival bid on Wednesday. Siemens aims to take over full control of Alstom's gas turbine division. MHI seeks minority stakes in its other power activities. Siemens said its combined proposal with MHI valued Alstom's power arm at 14.2 billion euros - nearly two billion euros more than GE's.
Paris has final say
Earlier on Thursday, Alstom CEO Patrick Kron made clear his preference for the GE tie-up, which he had a role in negotiating.
Speaking of Siemens and Mitsubishi, he said at an investor conference at French investment house Exane: "They want our gas activities, and we should take their transport business...well they are allowed to dream."
The tug-of-war for the power business of the 86-year-old French company has drawn in France's Socialist government, which has given itself powers to veto any deal to protect jobs and influence a key sector.
In a new twist on Thursday, a source close to the talks said the French state bank BPI was ready to take a stake in the future Alstom regardless of its partners. BPI would seek a stake in its remaining transport arm in the event of a deal with GE or take a stake in Alstom as a whole if the Siemens-MHI proposal were to win out.
Either scenario would mean the French state ends up with a minority stake in some Alstom activities. Alstom's board is scheduled to decide on the rival bids by June 23.
uhe/ipj (AFP, AP, Reuters, dpa)