As expected, Siemens AG and Mitsubishi Heavy Industries (MHI) have teamed up to counter GE's ongoing offer for the energy business of French conglomerate Alstom. The partners submitted a joint proposal that values Alstom's energy assets at $19.3 billion – more than $2 billion above GE's $16.9 billion bid.
A Siemens spokesperson has verified that the joint bid includes Alstom's wind energy business but did not provide further details. However, Siemens says it intends to acquire 100% of Alstom's gas business, including related service contracts, for EUR 3.9 billion in cash. Siemens says it intends to offer a job guarantee for three years in France and Germany for the transferred business after closing of the transaction. Siemens also plans to establish its European headquarters for the combined gas service business in France.
MHI intends to form a broad industrial alliance with Alstom and create three joint ventures by acquiring 40% of Alstom's steam and nuclear business, 20% of Alstom's grid business and 20% of its hydro business. As a result of these transactions, MHI says it will inject into Alstom EUR 3.1 billion in cash. In addition, MHI says itÂ intends to become a stable and long-term shareholder of Alstom by offering to acquire up to 10% stake from Bouygues SA.
‘This move would be a win-win solution for all related parties," says Joe Kaeser, president and CEO of Siemens. "Alstom would remain an independent energy and transport player with a strong brand."
According to Alstom, the Siemens-MHI proposal will be reviewed by an ad hoc committee and submitted to Alstom's board of directors. Meanwhile, GE continues to negotiate with the French government regarding the company's proposal for Alstom's energy business.