FRANKFURT/BERLIN/PARIS: Germany’s Siemens is working on a formal asset-swap offer for Alstom’s power business that could come as early as this week and see France take a stake in a resulting rail-focused French group, sources close to the talks said.
Alstom is already in talks with US conglomerate General Electric over a €12.35bn ($16.9bn) bid for its power arm, which it is due to review by June 2. However, under strong political pressure, it has opened its books to Siemens so it can propose its own deal if it wants to.
Some sources familiar with the talks cast doubt on whether Alstom would be interested in the new deal sketched out by Siemens. Still, a rival offer would give the French government more leverage with GE after it gave itself the power to block foreign takeovers in “strategic sectors”. The French government has repeatedly criticised GE’s bid, favouring alliance between the companies rather than a straight sale of Alstom’s power arm — which accounts for 70 percent of the group’s revenue — that would leave the French group with just its smaller transport business.
Meanwhile, it has advocated an alternative European tie-up between Alstom and Siemens. Initially though, it faced reluctance from both firms, long bitter rivals. But after several trips to Paris by CEO Joe Kaeser and nearly two weeks of access to Alstom’s data, Siemens has warmed to the idea and has been refining its bid to make it more attractive to Alstom and the French government, sources said.