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28.04.14

Alstom takeover twist as Siemens offers 'swap'

German engineering giant Siemens has entered the takeover battle for Alstom, expressing its willingness to hand over its transport divisions to the French company in exchange for its power business.

The move comes after the French economy minister, Arnaud Montebourg, made it clear that he would actively seek “other solutions” to last week’s reported GE takeover bid.

In the counter-bid set out by Siemens chief executive Joe Kaeser, the company has proposed paying €10bn (£8.2bn) in cash for Alstom’s power business that specialises in turbines for wind and nuclear energy, while Siemens would hand over the half of its transport business that manufactures high-speed trains and locomotives.

Last week, GE reportedly offered $13bn for Alstom's power turbines division, which contributes 70% of Alstom's revenues. However, the US bid is not expected to involve Alstom's rail division – leaving it as a standalone operation.

Today, French president Francois Hollande and his economy minister Arnaud Montebourg are meeting with Jeff Immelt, GE’s chief executive, following the American company's takeover bid, the day after Siemens threatened to derail the deal.

Montebourg called GE and Siemens “two major investors in France and leading players in our national industrial fabric” and said it was prepared to consider either bid. He added, however, that the government will be particularly firm on the need to maintain employment, investment, research and development, and decision-making in France.

“GE and Alstom have their timeframe, which is that of the shareholders, but the French government has its own, which is that of economic sovereignty,” said Montebourg. “But given the strategic issues for the industry and the French economy, the government will not accept a decision whatsoever in haste.”

GE has refused to comment any further on the negotiations, as has Siemens. But Alstom made this statement: “Alstom continues and deepens its strategic reflection and will make a further announcement no later than Wednesday 30 April morning. In the meantime, the company has requested that the trading of its shares remains suspended.”

(Image shows Joe Kaeser, chief executive of Siemens. Picture by Michael Sohn)

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