France’s Alstom, which manufactures turbines and trains, is the latest subject of a takeover bid generating global interest. US multinational General Electric (GE) is reportedly in talks to buy Alstom’s energy assets for US$13 billion, while Siemens has stepped into the picture to discuss ‘strategic opportunities’. Reports in the press suggest that Siemens is offering the French company half of its train-making business and a cash sum in exchange for the sector of Alstom’s business that makes turbines for the energy industry. While neither GE nor Alstom have publicly acknowledged takeover talks, the matter has come up among French politicians who are concerned that the country may lose another of its major manufacturing companies, coming so close on the heels of the Holcim/Lafarge merger announcement.
Although the French government does not currently have a stake in Alstom, it does have the power to intervene to protect national interests, so it looks like interested parties will need to win politicians over if they are to be successful in their takeover bid. Already this week, Siemens CEO Joe Kaeser and Chairman Gerhard Cromme and GE CEO Jeffrey Immelt have met with President Hollande to discuss the deal. The government is naturally concerned about the potential impact on the French economy, since Alstom employs some 18 000 people in France.
According to a Bloomberg report, Siemens is set to decide on a bid after a board meeting scheduled for today. Alstom has reportedly asked the German company to provide more details of its proposal before it gives Siemens more financial information. The report also includes mention of ABB Ltd, the world’s largest manufacturer of transformers, which has not commented on whether or not it plans to make a bid of its own.
Alstom reported in January that its full year profits had been impacted by declining demand for power plants. Prior to that, in November, the company announced plans to cut 1300 jobs and sell part of its transport business. In 2004, Alstom was saved from bankruptcy by the state. At this time, it seems the government may prefer Siemens as a potential buyer, while Alstom are reportedly favouring GE’s bid.
Edited from various sources by Katherine Guenioui
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