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Battle for Stafford's Alstom takes yet another twist: French government seeks higher bids

By Staffordshire Newsletter  |  Posted: June 18, 2014

Battle for energy and power engineering firm Alstom takes another twist

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THE battle for control of energy and power engineering firm Alstom - which has a major base in Stafford - has taken yet another twist. 

The French government has rejected a joint bid from Germany's Siemens and Japan's Mitsubishi Heavy Industries, who are battling giant American firm GE for control of Alstom. The French say they want both bidders to improve their offers. 

In the Siemens and Mitsubishi offer, Siemens aims to buy Alstom’s gas turbines business for €3.9 billion in cash while Mitsubishi would buy minority stakes in other Alstom power businesses, as three separate joint ventures, for €3.1 billion cash. 

 Meanwhile GE is seeking to beef up its rival offer with a proposal to sell its rail signalling business to Alstom, as a sweetener for taking over the energy side of Alstom’s operations. 

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Talks with French government ministers were continuing this week, and Alstom board members are due to debate the GE offer on June 23. Alstom has its headquarters in France and any bid will have to be approved by the French government, which has the power to intervene in take-overs of strategic companies. 

Some business analysts have suggested the Siemens-Mitsubishi bid would effectively mean the break-up of Alstom. And an Alstom insider raised doubts about whether joint ventures with Mitsubishi were a viable option. 

“We have had joint ventures before, and sometimes the only things achieved have been a change in the stationery and the logos on the high-vis jackets,” the source told the Newsletter.

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