Siemens to make offer in battle for France's Alstom

29th April 2014, Comments 0 comments

German engineering giant Siemens said Tuesday it had decided to make an offer to France's Alstom, heating up a politically-sensitive battle for what has been termed a French "national jewel".

In a highly anticipated but brief statement, Siemens gave no details of its intended bid that would aim to thwart interest in Alstom by US group General Electric (GE).

But the German behemoth said it was conditional on it being granted access to the French company's books and the green light to quiz its management.

"The prerequisite for this offer is that Alstom agrees to give Siemens access to the company's data room and permission to interview the management during a period of four weeks, to enable Siemens to carry out a suitable due diligence," it said.

"A letter in this regard was submitted this afternoon to the French company," it added.

Pipping Siemens to the post, French Economy Minister Arnaud Montebourg earlier told parliament that the German company was in the throes of putting forward an offer.

"An offer by German company Siemens is being presented," he told the National Assembly of lawmakers.

The fate of Alstom was suddenly put into play last week when it it emerged that GE was in advanced talks to buy its energy interests for about 10 billion euros ($14 billion).

According to a preliminary proposal sent this weekend to Alstom, seen by AFP but not confirmed by the German company, Siemens offered to buy Alstom's energy business and give the French giant part of its train activities in return.

The French minister also reproached the head of Alstom, Patrick Kron, in strong terms for not informing the government of takeover talks with the US group, accusing him of deliberately keeping him in the dark.

Meanwhile Prime Minister Manuel Valls said that Alstom was "of national strategic importance" and stressed the government would keep a watchful eye over offers.

Energy accounts for about 70 percent of Alstom's business, with the rest focused mainly on making railway equipment including the TGV high-speed train.

But economists say Alstom is too small alongside giants such as GE and Siemens and that it is uncompetitive.

- 'National jewel' -

The latest announcements come a day after Siemens chief Joe Kaeser met French President Francois Hollande in Paris for what the chief executive called "a very open, trustful and amicable exchange".

The company had said in a brief statement late Monday that after the talks it would meet as soon as possible to decide on a possible offer.

In unusually frank remarks about company strategy, the German government on Monday said a possible tie-up between the French and German groups offered a "big opportunity" for both countries.

It would present "great potential in terms of industrial policy for Germany and France", a spokesman for the economy ministry said in response to reporters' questions.

Hollande, who also met the head of GE Monday, has vowed to safeguard jobs at Alstom, which is one of France's biggest private sector employers with around 18,000 staff across the country.

The battle for the French company is politically sensitive as Hollande's Socialist government battles record high unemployment and declining industrial competitiveness.

During his hour-long meeting with GE's chief executive Jeffrey Immelt, the French leader pressed his case for jobs and for Alstom's French decision-making centre to be protected.

Hollande has said that the French state would "inevitably have a say" in the case and that the "sole criteria" in choosing the successful bidder would be which one "would be the best in creating more business and jobs".

Montebourg bristled Monday at the possibility that in the space of three days, Alstom "can decide to sell 75 percent of a national jewel behind the backs of the employees, of the government, of most of the board and of the senior executives".


© 2014 AFP

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