Battle for France's Alstom heats up with Siemens offer
PARIS - Agence France-Presse
Siemens made the announcement just as Alstom is being pursued by US giant General Electric, and a day after a source close to the matter said the German company was planning a rival bid. AFP PhotoGerman industrial giant Siemens said Sunday it wanted to discuss strategic opportunities with France's Alstom, raising the prospect of a takeover tussle with General Electric for the beleaguered firm.
The offer came on the heels of reports that the US giant wants to buy the French engineering group, which manufactures the country's groundbreaking high-speed TGV trains.
Alstom is a politically-sensitive symbol of engineering prowess in France and a key exporter, seen as one of the jewels of French industry.
GE chief Jeff Immelt was expected in Paris on Sunday but a meeting with France's Economy Minister Arnaud Montebourg was deferred by Montebourg's office, which said the minister needed more time to examine the offers following the Siemens announcement.
Montebourg's office did not give a new date or time for the meeting with Immelt.
According to earlier press reports, the GE boss could also meet with Prime Minister Manuel Valls on Sunday. But informed sources in the government said no such meeting had been pencilled in as yet.
Montebourg, a fierce protector of French industry, has pledged to study various options for Alstom following reports that GE would bid to buy the company's power-generation division, accounting for more than 70 percent of its business with revenues of 14 billion euros ($19 billion).
He has said the government was exercising "patriotic concern and vigilance" while handling the case.
Although the French state has not held a stake in Alstom since 2006, France's Socialist government wants to obtain guarantees on "jobs, the location of activities and energy independence", according to President Francois Hollande's office.
GE has 305,000 employees around the world and its turnover totals $146 billion.
Press reports have said GE was ready to fork out 10 billion euros for the energy division, which does not comprise the unit that makes the high-speed trains.
But the stakes were raised on Sunday when Germany's Siemens said it had "submitted a letter to the board of Alstom to signal its willingness to discuss future strategic opportunities."
The Siemens statement did not give any other details.
When Alstom was on the brink of collapse in 2003-2004, the French state strongly opposed a takeover by Siemens.
The group is once again facing a financial crunch and its shares have dropped sharply in the last year.
But Alstom chief Patrick Kron is said to remain strongly hostile to any tie-up with the German giant.
"A Siemens offer has the advantage of being European," said one observer. "But is the solution better for French interests than the GE offer? The answer to that question will determine which offers wins."
The French stock market regulator suspended trading in Alstom shares on the Paris stock market Friday after they shot up by almost 11 percent to 27.0 euros on bid speculation.
The pressures on the group, which put part of its rail activities up for sale earlier this year, come amid a policy switch from President Hollande's government with a drive to cut public spending while relieving taxes on businesses.
The measures, highly unpopular with the Socialist left, are intended to get industry back on a competitive track, boost growth and exports and reduce record employment.
Jean-Claude Mailly, the head of the Force Ouvriere trade union on Sunday called for the government to buy Alstom shares to allow it a greater say in the group, as one of France's "strategic sectors."
He said the two potential offers should be carefully examined to evaluate the impact on jobs and Alstom's activities.
GE employs 11,000 workers in France and its European headquarters are located in the eastern town of Belfort. Alstom meanwhile counts 18,000 employees in the country.