Germany's Siemens and Japan’s Mitsubishi have put forward a plan to acquire parts of Alstom. A successful deal will leave the German group with the French firm's coveted gas turbines business.
After weeks of tug of war, Siemens chief Joe Kaeser has now cherry-picked Japan's Mitsubishi Heavy Industries (MHI) as the German conglomerate's partner in the poker game to acquire French industrial giant Alstom.
The two firms presented a joint binding offer for parts of Alstom's lucrative power business and assets.
With this move, the original idea - particularly lauded in France - of creating two European champions appears to have died out as collaboration between Siemens and Alstom in train business has been postponed indefinitely.
Furthermore, Kaeser puts to test his tactical skill as well as flair for French sensitivities with this decision.
A German-Japanese offer is likely to find favor with the government in Paris. If Alstom's board of directors approves the bid, then the company could remain a symbol of France's industrial might. At the same time, the deal will allow Siemens to stay out of the problematic areas of Alstom's business.
For instance, the French firm is not only grappling with huge amounts of debt on its books, but is also facing a corruption probe in the US, drawing comparisons with the $800 million US settlement Siemens paid following a global bribery scandal in 2008.
The French government also sees Alstom as a firm of national strategic importance and is concerned about safeguarding jobs at one of France's biggest private sector employers.
"My preference is to preserve Alstom," economy minister Arnaud Montebourg has repeatedly stressed in recent days. At the same time, he hinted that an alliance modeled after the automaker PSA Peugeot Citroen and China's Dongfeng or that of French car maker Renault and Japan's Nissan as a solution for Alstom.
Montebourg also pointed out that Mitsubishi was already working together with the French state-owned nuclear group Areva and building nuclear reactors in Turkey.
General Electric, meanwhile, campaigned for its plans on June 16 with full-page newspaper ads with the headline: The future lies in "Made in France," referring to the advantages of a partnership between the American conglomerate and Alstom.
No bidding war?
However, there haven't been any reports so far on GE improving its offer. The company declared that it will not take part in a bidding war. In addition to the 1000 new industrial jobs that GE said its plan will create in France - a country battered by high unemployment rate - the American giant has also promised to strengthen Alstom's transport division, which manufactures the world-famous high-speed TGV trains, among others.
The word "acquisition" did not appear in the newspaper ads, despite GE offering around 12.35 billion euros for the French firm's power business. Instead, the talk was of an alliance.
At the start of the merger negotiations, both Siemens executives and French politicians aggressively campaigned for the creation of a Franco-German joint venture - on the lines of pan-European firms like Airbus - in the areas of train and power businesses.
According to the plan, Alstom would acquire Siemens' train business and in return, Siemens gets the French group's energy business. Gerhard Cromme, head of Siemens' supervisory board, is known as a major German proponent for such a project.
"If Europeans were losing control over the production of power technology now, then in the future we will become as dependent in this sector as we are now on American companies such as Google, Amazon and Apple in Internet business," said Cromme, in a recent interview to the French business magazine "Les Echos".
"It can only be in the interest of all Europeans to have industrial champions which can hold their own in global competition," he added.