Boston, MA 06/13/2014 (wallstreetpr) – Siemens, the German engineering multinational and Mitsubishi Heavy Industries, the Japanese company, announced on June 11, 2014 that they were most likely to collaborate in bidding for Alstom, the French maker of high-speed trains and power turbines, in order to trump their rival General Electric Company (NYSE:GE). GE has done the bidding for the same at an offer of $16.9 billion.
What Mitsubishi and Siemens said?
A joint statement was issued by Mitsubishi and Siemens, in which they said that the two companies joined their forces in order to evaluate the potential proposal for certain assets of Alstom. This was done to strengthen the future positions of Alstom, Mitsubishi and Siemens.
A strategic plan to trump GE in Alstom Bid
Siemens, which is Berlin and Munich based, was encouraged by French government itself in order to offer for Alstom, after the bid of GE for the generation and transmission of Alstom’s power was received roughly in Paris. In order to curtail General Electric Company (NYSE:GE) in this bid, Siemens suggested trading the rail assets of the company for power business of Alstom. However, the analysts as well as the officials at Alstom took this idea with substantial cynicism.
How will the Alstom’s assets be divided?
After a collaborated bid, Mitsubishi and Siemens did not proposed on dividing the assets of Alstom, but there seems to be a larger picture of Mitsubishi creating opportunities for Siemens to divide the parts of their company which might attract regulatory scrutiny.
In the board meeting of Siemens, which will be held shortly, the possibility of an arrangement under which Siemens will get hold of Alstom’s gas turbine business, shall be discussed. This would leave Mitsubishi with power distribution and steam turbine business of Alstom. The deal like this would help in reducing the concerns of the regulators.
Statement from General Electric
General Electric Company (NYSE:GE) in its statement said that the company will continue having constructive discussions about the details of this proposed union with Alstom. The statement said that the partnership between GE and Alstom will help in building global transport and energy leader in France along with creation of 1000 new jobs for the French.
