The Low Post News

Race to Acquire Alstom Heating Up as Bids Increase

The race internationally to acquire Alstom SA the engineering company based in France entered the home stretch Friday with Mitsubishi Heavy Industries and Siemens responding to the increased bid by General Electric Co. by increasing their own combined bid.

Alstom is set to make a decision by the latest Monday on what offer it will accept, after the government of France solicited higher bids for the business, which builds power station turbines and pioneered the TGV high-speed trains that were later exported worldwide.

The French government has expressed concern of possible job losses and the loss of sensitive technology dealing with energy, from France.

Germany’s Siemens and Japan’s Mitsubishi said on Friday in a joint statement that their bid would be increased by 1.2 billion euros to 8.2 billion, which would increase their valuation overall of the energy business of Alstom to 14.6 billion euros.

Siemens is hoping to acquire the gas business in its entirety from Alstom while Mitsubishi would have a 10% stake in the French company under its proposal.

At the same time, GE has bid 12.35 billion euros to buy the power business of Alstom. Thursday it added more guarantees on employment and the decision making by offering to establish a new energy company as three joint ventures, but leaving the value in cash unchanged.

CEO Patrick Kron of Alstom earlier said very clearly that he preferred a tie-up with General Electric, which he played a big role in negotiating with. Mitsubishi and Siemens emerged as a pair of rival bidders after the government of France started to seek a better deal for the company.

CEO Jeff Immelt from GE met with officials from France on Thursday in the company’s final effort to lessen the political concerns about the fate of Alstom in an attempt to fend off the rival bid by Siemens.

As a way to address President Francois Hollande’s government’s concerns, the new offer will preserve the role of decision-making for France, while at the same time strengthening the mostly transportation based business that will remain.

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