5 Min Read
PARIS (Reuters) - General Electric (GE.N) and Siemens defended rival proposals to buy the power arm of Alstom (ALSO.PA) on Tuesday, both assuring France that its prized engineering firm would emerge strengthened, including in its remaining transport business.
Top executives for both groups told lawmakers their plans were good for Alstom, for France and its jobs, as they strived to address government concerns over the fate of the once bailed-out company and the nation's wider industrial footprint.
During a parliamentary hearing, the chairman of Siemens France, Christophe de Maistre, said the German group hoped to submit by June 16 at the latest a formal asset swap offer that would create two European industry champions, one in power around Siemens, the other in rail around Alstom.
GE Chief Executive Jeff Immelt, meanwhile, spoke in defence of his group's 12.35 billion euro ($16.9 billion) bid for Alstom's power arm. He said GE would make detailed commitments to increase jobs in France, including by opening new sites, and was also considering a tie-up in rail signalling that would give Alstom control of that business.
The French government has said it wanted better offers that would preserve jobs as well as the country's energy independence. Alstom is a supplier of turbines for nuclear plants worldwide, and Paris is concerned that a straight sale of its power arm could hurt France's position in the energy sector.
The government is also worried that Alstom, which makes France's iconic TGV high-speed trains and was bailed out a decade ago, would be too weak as a standalone rail group.
Tuesday's parliamentary hearing took place after GE agreed to extend its bid timetable by three weeks until June 23 at the government's request, a letter of intent from Siemens offering to pursue a rival proposal, and a French government decree giving itself an effective veto on any deal.
Siemens is interested in all of Alstom's power assets, except those France would see as essential to its energy independence, de Maistre told lawmakers.
Sources familiar with the Siemens proposal told Reuters that it would ring-fence Alstom's steam turbines used in nuclear plants, as Paris fears that having these fall under U.S. control could jeopardise France's exports in the atomic power industry.
Siemens would meanwhile hand Alstom all of its trains business, creating a bigger transport group that would be majority owned by France and would have its headquarters there. In rail signalling, Siemens would offer to take over Alstom's business but set up the headquarters of that unit in France.
De Maistre noted that a tie-up between Alstom and Siemens in transport would give the business the critical mass Alstom needed in that sector, putting it on an equal footing with China's CNR and CSR and ahead of Canada's Bombardier (BBDb.TO).
For his part, Immelt strived to convince lawmakers that a straight sale of Alstom's power turbines and grid business would not cause the French company to disappear, absorbed by GE, but would make it stronger as a whole and on a global stage.
"Alstom will not disappear. Through our industrial project France will have more influence in the global power business than you do today," he said.
GE had already said it was talking with French investors about potential ventures in Alstom's offshore wind and hydro power assets and that it was looking to address French concerns over its nuclear-related assets. The talks are ongoing, "open and constructive", Immelt said.
In transport, he said GE was now in talks with the government and Alstom over a deal combining both group's signalling assets and handing Alstom control of the business.
"Alstom Transport would have the size, technology and financial strength to measure up to rivals such as Bombardier, Ansaldo (STS.MI) and Siemens," Immelt said.
Editing by David Evans