Siemens, Mitsubishi Heavy mull joint bid for Alstom assets

Jun 12, 2014 - German electrical engineering major Siemens AG (ETR:SIE) said yesterday it had teamed up with Japan’s Mitsubishi Heavy Industries Ltd (TYO:7011) to prepare a potential bid for certain operations of France’s Alstom SA (EPA:ALO).

The alliance has been formed following an invitation by Siemens, MHI’s president and CEO, Shunishi Miyanaga, said in a statement. The pair will decide whether to make an actual offer by June 16. The two companies did not specify which assets they are targeting, but according to previous media reports, the possible transaction would involve Alstom’s energy business except for its wind activities.

In late May, Reuters quoted sources as saying that Siemens was ready to transfer its own rail business and pay less than EUR 7 billion (USD 9.5bn) in cash for Alstom's power division, excluding nuclear, wind energy, transmission and distribution (T&D) operations.

According to a recent report by Bloomberg, the Japanese heavy machinery maker could acquire Alstom’s steam turbine and grid businesses, leaving the gas turbine operations to its German partner. Two of the news agency’s sources have mentioned that MHI’s participation may increase the valuation of Siemens’ proposal and also help deal with antitrust issues.

As previously announced, US conglomerate General Electric Co (NYSE:GE) submitted a binding bid worth a total of USD 16.9 billion for Alstom’s thermal, renewables and grid operations. In a statement e-mailed to Bloomberg, GE informed the news agency it is still holding constructive talks about the potential tie-up with Alstom.

(EUR 1.0 = USD 1.354)

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