General Electric and Siemens Interested in Acquiring Alstom

General Electric and Siemens Interested in Acquiring Alstom :It is reported that GENERAL Electric (GE) has offered 13 billion US$ to acquire the French company while recently Siemens has also made an offer to acquire Alstom’s power turbines and grid equipment.

In November 2013 Alstom has announced that it would sell a stake in its Transport division as well as other assets worth up to €3bn by the end of 2014 and shed 1300 jobs. Alstom’s value has fallen by about 30% during the year up to March over concerns about its cashflow, while in its nine-month results in January the company said its profits had fallen by 12% following a drop in demand for power plants.

Until recently, GE’s interest in acquiring Alstom was not confirmed. However, it has been reported that GE is in negotiations with Alstom over a 13 billion US$ takeover of the French company. Alstom had responded to the rumours by issuing a statement on its website declaring that it has “not [been] informed of any potential public tender offer for the shares of the company.” It added that it plans to communicate its annual results on May 7 “as planned” and that it will “use this opportunity to give an update on the prospects of its activities.”

GE has not commented on the issue publicly.
On the other hand last week Siemens has submitted a letter of proposal, thus entering the race to acquire Alstom. In this proposal, Siemens is offering a very radical sectorial reorganization in Europe by creating two new European Establishments. One of these will operate in the energy sector with leadership of Siemens, who will acquire Alstom’s thermal power, renewable power, and grid divisions. The other will be operating in the field of Transportation under the leadership of Alstom. For this Siemens will allow Alstom to acquire its high speed train and locomotive business and provide a “significant cash contribution” to Alstom shareholders. However, Siemens still considers to retain its commuter and urban rail division in Europe.

Recently French economy minister Mr Arnaud Montebourg has declared that the government would not accept a hastily made decision, and that it would seek to preserve French jobs and industrial base. He said that in particular the French government would be extremely vigilant to ensure the country’s nuclear industry remains independent.

In his statement French Economy Minister Mr. Arnaud Montebourg said “GE and Alstom have their calendar, which is that of shareholders, but the French government has its own, which is that of economic sovereignty,” providing the first official confirmation of GE’s offer.

According to Reuters, sources close to the Alstom GE deal described talks as “advanced,” while the offer from Siemens remains only an expression of interest at this stage.

General Electric and Siemens Interested in Acquiring Alstom

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