GE and Siemens vie for Alstom assets

Alstom has received a $16.9 billion binding offer from General Electric to acquire the French company's Energy businesses and given Siemens one month to propose its own deal.

The Board of Directors for Alstom (Levallois-Perret, France) announced it has received a $16.9 billion offer from General Electric (GE, Fairfield, Conn., USA) to acquire the French company's Energy businesses including Thermal Power, Renewable Power and Grid Sectors. With 65,000 employees, these units reported €14.8 billion in sales in fiscal year 2012/13.

If the deal goes through, Alstom will use the proceeds to strengthen its Transport business, where it is a global leader, producing high-speed trains and transit systems.

The Board also reviewed a declaration of interest from Siemens (Munich, Bavaria, Germany), and said it will provide fair access to information for its German rival to make a competitive offer. Alstom gave Siemens until the end of May to propose its own deal.

GE reportedly has an advantage in that it has a good relationship with Alstom, who had indicated more interest in "alliances" vs. "an absorption". GE chief executive Jeffrey Immelt assured French President Francois Hollande that GE would protect French jobs locating global headquarters for several key businesses in the country, including for power grids, hydro power, offshore wind and steam turbines. He also said GE would work with the French government, its utilities and nuclear group Areva to protect the country's strategic nuclear sector and its exports and would be willing to sell Alstom's wind turbine activities to French investors.

In its own press release, Alstom asserted that its offerings in Power and in Grid are complimentary with GE's and that, "The combination of the Energy activities of Alstom and GE would provide customers with the most complete and advanced range of solutions, generating significant synergies and an increased capacity to invest in technology."