Boston, MA 06/16/2014 (wallstreetpr) – General Electric Company (NYSE:GE) offered to acquire Alstom’s energy arm for $16.88 billion that covers the renewable power, thermal power and grid business. As per the agreement with French Government, an active partner in Alstom, GE needs to create 1,000 jobs within three years of the deal. The Finance Minister Michel Sapin also expects GE to improve its offer.
General Electric Company (NYSE:GE) already mentioned that the discussion is in the progress that the Company’s plans to expand the alliances energy businesses with global partnership with Alstom for transport.
On the contrary
The French Government is looking for alternative options as the buying process of Alstom assets still continues.
Mitsubishi Heavy Industries (MHI) and Siemens plans to submit a formal proposal to the Alstom’s Board of Directors on June 16. But, the cut-off date for the previous offer remains active till June 23. The deal is to challenge GE.
MHI-Siemens plans to enter a deal with two steps transactions. In the first step, both the companies together offer $12.3 billion for Alstom’s turbine business, of which Siemens will acquire gas turbine business, and Mitsubishi will inject cash and industrial assets into a joint venture for steam turbines. In the second step, Siemens also propose to combine Alstom’s rail transport businesses which the government initially lobbied for the expansion in Europe.
As per the fresh agreement, both the government and Mitsubishi will have an equal stake, and they will acquire the stake of Bouygues (29%). But, there is clarity over the liquidation of Bouygues’ holding interest in Alstom.
The divestment deal involves the French state bank BPI whether General Electric Company (NYSE:GE) or Mitsubishi Heavy Industries (MHI) acquire stakes in Alstom.
According to some sources, the Siemens-Mitsubishi plan will break the entire power business and scale down the authority of the government’s holding over Alstom. However, Finance Minister Sapin said that the transaction primarily intends to protect jobs and extend the government’s investment rather than putting its through complete foreign take over. Therefore, the French government is offering the bidding preferences.