Siemens, Mitsubishi make case for deal to rival GE
- Article by: GREG KELLER
- Associated Press
- June 17, 2014 - 10:50 AM
PARIS — The CEOs from Siemens and Mitsubishi Heavy Industries met with the French president on Tuesday to promote their joint offer to buy parts of French engineering company Alstom and head off a rival bid from General Electric Co.
Joe Kaeser of Germany's Siemens AG and Shunichi Miyanaga of Japan's Mitsubishi said they sought to persuade Francois Hollande that their offer was superior to GE's and would create "a strong, innovative European champion."
Alstom executives have said the deal negotiated over two months ago with GE was their preferred option, but French government concerns over keeping jobs and strategic technologies safely at home have delayed the deal's signing, giving Siemens and Mitsubishi an opening they hope to exploit.
"We believe this concept for Alstom, Mitsubishi and Siemens is superior in financial aspects, in strategic and industrial aspects and not least in social aspects," Kaeser said at a news conference after meeting Hollande at the Elysee presidential palace.
The proposed deal unveiled late Monday would see Siemens pay 3.9 billion euros ($5.3 billion) for Alstom SA's gas turbine business. Japan's Mitsubishi would purchase a 10 percent stake in Alstom and inject 3.1 billion euros into the struggling company.
Including minority stakes by Mitsubishi in various other Alstom businesses, the deal values the French company at $19.3 billion, slightly more than the value implied by G.E.'s offer, the companies said.
"We want to keep a proud French icon strong and make it stronger," said Kaeser, adding he did not want to dismantle the company.
Alstom had in April already negotiated a competing $17 billion offer for its energy business from U.S. conglomerate General Electric Co., but the French government intervened to delay the deal's signing. GE has given Alstom until June 23 to decide.
While the French government finds GE appealing because of its long presence in France, it has tried to get other potential suitors for a company considered strategic because of its large presence in the key energy and transport sectors.
A ranking French official said in April the French priority in all matters is jobs, energy independence and keeping companies on French soil.
In addition to the cash transaction, Siemens said it would offer job guarantees for three years in France and Germany for the transferred business, and would establish its European headquarters for the combined gas service business in France.
Siemens also indicated that, following the closing of the deal, it would eventually "be prepared to become a long-term anchor shareholder in a combined transport business."
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