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Siemens ups bid as Alstom board recommends GE offer

Alstom's board may clash with the French government over GE's offer
Alstom's board may clash with the French government over GE's offer Reuters/Stephane Mahe

The board of French engineering group Alstom has recommended an offer by the US’s General Electric (GE) to buy its energy interests, despite Economy Minister Arnaud Montebourg’s apparent preference for Germany’s Siemens. Alstom's shares shot up on Wednesday 10 per cent when trading was resumed after a suspension.

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Siemens upped its offer to Alstom following, the board’s announcement, assessing the French company’s energy activities’ worth at 10.5-11 billions euros and proposing to cede its metro and high-speed train interests to Alstom as part of the deal.

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Siemens, which has received no replies to its letters to Alstom, said it was “disappointed by the lack of cooperation” from the French company’s boss, Partick Kron.

Alstom managing director Jeffrey Ilmert told reporters that GE’s offer was “good” for the company and for France after Tuesday evening’s unanimous vote by the board to “recognise the merits” of the offer and set up a committee to look into pursuing it.

Siemens earlier requested four weeks to put together its bid to counter that of US group General Electric and on Wednesday it emerged that it was also discussing with the UK’s Rolls Royce for its energy interests.

Addressing Parliament on Tuesday, Montebourg scolded the head of Alstom for not informing the government of talks with GE, which came to light last late last week.

After a meeting with unions yesterday, Montebourg said he had asked the French Financial Markets Authority, which regulates the stock market, to make sure Alstom considers both bids.

“I have instructed the government’s representative to the Financial Markets Authority to ask the authority to instruct the board of directors of Alstom to ensure the strict, fair consideration of both General Electric and Siemens’ offer, so that there can be a fair debate over the possibility or not of a takeover, in what conditions and by whom.”

The government, which is worried about the implications for jobs and energy security, “fully intends to protect the interest of our country”, he said.

In a letter to President François Hollande published by business daily Les Echos on Tuesday, Ilmert defended GE’s offer, promising that it would mean an increase in jobs in France and that GE would establish its European thermal energy headquarters at Alstom’s site in the eastern French city of Belfort and base its worldwide operations in other sectors, including steam turbines, water and offshore wind power in France.
 

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