French Finance Minister Michel Sapin said he expects General Electric Co. (GE) may improve its $17 billion offer as it competes with Siemens AG (SIE) to buy energy assets of power-equipment maker Alstom SA. (ALO)
“We’re not finished with improvements, on both sides,” Sapin said today on Europe 1 radio and i-Tele. Siemens’s offer becomes more attractive with Mitsubishi Heavy Industries Ltd. (7011) participating, he also said.
The two sides of bidders have been competing for the backing of the government, which aims to preserve French interests regarding jobs, research centers, and turbines for nuclear plants, Sapin said. While the government is weighing in, the decision is Alstom’s, and Sapin has no preference, he said.
“We have made progress in our discussions with the French government, including expanded alliances in the energy businesses with French investors as well as a global partnership with Alstom on transport,” Deirdre Latour, a spokeswoman for GE, said today, declining to comment on details of the bid. “Alstom will remain a vibrant player in the energy and transportation industries.”
Siemens and Mitsubishi Heavy have said they will decide by tomorrow whether to submit a joint proposal to Alstom’s board of directors. The Tokyo-based company is offering to buy a stake of about 10 percent in Alstom, the Nikkei newspaper said today. Hideo Ikuno, a spokesman for the Japanese machinery maker, declined to comment on the report.
Economy Minister Arnaud Montebourg presented union representatives with a plan for the government to team up with Mitsubishi Heavy to buy a stake in Alstom, Gabriel Artero, chairman of the metal-worker federation of the CFE-CGC union, said June 13.
Under the plan, Siemens would form a gas-turbine joint-venture with Alstom, and Mitsubishi would create ventures with the French company’s other energy units, Artero said after meeting with Montebourg.
Montebourg has said he favored the offer from Siemens, which has proposed to swap its trainmaking business for Alstom’s energy assets to create two leading European companies in rail and energy. Montebourg has also said GE’s bid is much improved after the company has pledged to create 1,000 new jobs in France. Alstom also has a trainmaking unit, which isn’t part of GE’s offer.
GE, based in Fairfield, Connecticut, has said it’s flexible on the terms of its bid, signaling a willingness to make concessions in negotiations with the French government. Chief Executive Officer Jeffrey Immelt made a rare appearance by a U.S. corporate leader before France’s National Assembly in May, saying GE would protect jobs and the nation’s industrial base.
GE is confident its bid will prove successful, Vice Chairman John Rice said at a conference last week in Singapore.
The U.S. company agreed last month to a French government request to extend the deadline for consideration of the Alstom offer to June 23. French officials asked for the three-week delay while seeking better terms for an acquisition.
To contact the reporter on this story: Francois de Beaupuy in Paris at email@example.com