General Electric Co. Chief Executive Officer Jeffrey Immelt will meet with French government officials and union leaders tomorrow to present additional details of the company’s offer for Alstom SA’s energy assets.
Immelt, who first presented the $17 billion bid seven weeks ago, will hold talks in Paris this week as GE makes a final push ahead of a June 23 deadline, Deirdre Latour, a spokeswoman, said today in a telephone interview. Negotiators are refining details of the plan, including the structure of the terms on Alstom’s renewable energy, grid and transport businesses, Latour said.
GE is seeking to thwart a counterbid by Siemens AG, which aims to carve up Alstom together with Japan’s Mitsubishi Heavy Industries Ltd. and Hitachi Ltd. The Siemens proposal values the energy assets at 14.2 billion euros ($19.3 billion).
Immelt’s involvement underscores the stakes in a deal that would give Fairfield, Connecticut-based GE control of Alstom’s technology for electricity transmission and power-plant maintenance as Europe’s economy starts to recover. The acquisition would be GE’s biggest ever and bolster Immelt’s push to return the company to its industrial roots.
France’s role is pivotal as political leaders seek concessions on issues such as local employment and the country’s energy independence. Steve Bolze, CEO of GE’s power and water unit, and the lead negotiator, John Flannery, have held meetings with government officials over the past week, said a person familiar with the matter, who asked not to be identified because the matter is private.
Alstom’s board has given preliminary approval to GE’s bid. The French company said it would consider other offers before the June 23 deadline, and Siemens unveiled details of a joint bid with Mitsubishi for Alstom’s energy operations on June 16.
Siemens CEO Joe Kaeser told France’s National Assembly yesterday that the Munich-based company would also safeguard jobs and local investments.
Siemens is offering 3.9 billion euros for Alstom’s gas turbines, while Japan’s Mitsubishi and partner Hitachi would pay 3.1 billion euros for stakes in the steam-turbine, power-grid and hydro businesses. The German manufacturer is also offering to combine its entire rail business with Alstom’s.
Mitsubishi has approached shareholder Bouygues SA about acquiring a stake of as much as 10 percent in Alstom, a holding valued at about 900 million euros, CEO Shunichi Miyanaga told the lawmakers. He said he wants the French state to also take a 10 percent stake in Alstom to support the deal.
The French government hasn’t ruled out taking a stake in Alstom, a person familiar with the matter said today.
GE rose 0.1 percent to $26.89 at the close in New York. Siemens slid 0.3 percent to 98.86 euros in Frankfurt, while Alstom gained 1.7 percent to 29.47 euros in Paris.
GE has made a binding offer to acquire Alstom’s energy business, which makes turbines and power transmission equipment. The proposal doesn’t include the company’s transport business making high-speed TGV trains. Immelt said last month that GE also would consider selling its rail signaling unit to Alstom.
The refinements to GE’s offer include a measure to have an independent audit to back up GE’s vow to create 1,000 industrial jobs in France as part of an Alstom deal, one person familiar with the talks said. GE also is willing to make commitments for future spending on France-based operations, another person said. The company doesn’t intend to increase the cash component, the people said.
Alstom’s initial assessment of the Siemens plan is that it’s too complicated, requiring a mix of cash and assets and the creation of joint ventures and the separation of existing operations, two people familiar with the matter have said. The French company doesn’t view a separation of the gas and steam turbines business as workable, said the people.
“It is both highly complex in structure and likely to be immensely more so from an operating standpoint,” Nicholas Heymann, a New York-based analyst at William Blair & Co., said in a report yesterday. “Splitting gas and steam turbines may not be viable.”