MUNICH/PARIS: Germany's Siemens and Japan's Mitsubishi Heavy Industries (MHI) will present a joint offer for France's Alstom in Paris on Monday, challenging a General Electric bid that sparked French government concern about retaining jobs and industry expertise.
Siemens chief executive Joe Kaeser and Mitsubishi chief executive Shunichi Miyanaga are due to meet Alstom officials in Paris on Monday afternoon, a source close to the Japanese firm in France said.
According to sources close to the bidders, they will propose that Siemens acquire Alstom's gas turbines business while MHI inject cash and industrial assets into a joint venture in steam turbines.
Their offer comes shortly ahead of a June 23 deadline set by General Electric for its 12.4 billion euro ($16.9 billion) bid for all of Alstom's energy arm, which includes its thermal power, renewable power and grid businesses.
However the Siemens-Mitsubishi plan, which was discussed by Siemens' supervisory board late on Sunday, would not be a direct buyout of Alstom's power assets but instead set up one or several joint holdings in its power businesses, including in hydroelectric power equipment and grid.
The deal would comprise a cash element that could reach around 9 billion euros, those same sources said - including a payment of 4 billion by Siemens for the gas turbines business and Mitsubishi's cash injection in the steam turbines joint venture and payment for a direct stake in Alstom.
POLITICAL GRILLING
Kaeser and Miyanaga are scheduled to outline the plan to France's lower house of parliament at 1500 GMT on Tuesday, according to the parliamentary press office, and are likely to face tough questions from lawmakers worried about national interests.
French Economy Minister Arnaud Montebourg has actively played up a potential rival offer from Siemens and MHI as it seeks to pressure GE into improving its offer with guarantees to create jobs, localize decision centres in France and secure the nation's nuclear know-how.
The government has already secured a pledge from General Electric to create 1,000 new jobs in France within three years of a deal, but Finance Minister Michel Sapin said on Sunday he expected the U.S. conglomerate to further improve its offer.
The government is advocating "alliances" that would preserve Alstom as a player in both transport and energy. It sees both sectors as strategic to France and is keen to preserve jobs at a time when unemployment is stuck above 10 percent and a growing chunk of voters are turning towards the far-right.
It has also actively lobbied for Siemens to combine its rail activities with those of Alstom - known for the high-speed TGV trains - saying it would create a European rail champion.
But Alstom has not shown interest in a transport deal, and according to sources close to the talks, Siemens is now expected to propose this only at a later stage in the negotiations, as something entirely separate from any turbines deal.
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