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France

France

Siemens/MHI Alstom bid excludes wind

FRANCE: Siemens and Mitsubishi Heavy Industries (MHI) have outlined their bid for parts of Alstom's power business under a deal that seems to leave the wind division untouched.

The EUR 7 billion bid is a counter to one put forward by GE in April, which would see it takeover the whole of the power division in exchange for EUR 12.35 billion.

Seemingly to allay French Government fears of a foreign takeover, the Siemens/MHI deal leaves much of the business under French control, listed on the French market with a jobs guarantee.

While the bid is made up of a number of different transactions for different elements of the company, the wind business is not covered. As such, the renewables division would be the only power business left solely under Alstom's control, along with the rail division.

Areva said last month that it would consider taking over Alstom's wind business if an opportunity came up in GE and Siemens' tussle for Alstom Energy.

The MHI/Siemens offer includes the formation of three joint ventures, with MHI also becoming a shareholder in Alstom. The Japanese firm would form JVs by acquiring 40% of Alstom's steam and nuclear business, 20% of its grid business and 20% of its hydro business. This would mean the injection of EUR 3.1 billion in cash.

Siemens for its part would take over 100% of Alstom's gas business for EUR 3.9 billion. Referring to Alstom's rail business, Siemens said it will look at oportunities to "create a European mobility champion". Siemens had previously said it would include a transfer of some of its rail business to Alstom as part of the deal.

Siemens said it would offer a job guarantee for three years in France and Germany for the transferred business after closing of the transaction. It would also establish its European headquarters for the combined gas service business in France.

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