GE, Siemens plot bids for power equipment firms
GE bids $13.5bn for Alstom's power arm, Siemens may make counter offer
The board of French engineering giant Alstom has confirmed it is weighing up a $13.5bn bid for its energy division by US-based General Electric (GE), while competitor Siemens has made an offer for Rolls Royce's energy business.
GE has submitted a binding offer worth $16.9bn for Alstom's energy arm, which is based on an enterprise value of $13.5bn for the company and its $3.4bn cash pile.
Its bid is for the Thermal Power, Renewable Power and Grid sectors of Alstom, as well as its corporate and shared services arms. Between them, the divisions employ around 65,000 people and had sales of $20.5bn in its last financial year.
Alstom's board said that if it decided to accept the deal, it would refocus on becoming a standalone transport firm and use the cash to invest in the business and pay down debt, as well as returning some to its shareholders.
The firm said that it had also received a declaration of interest from Siemens about a counter-offer. Construction giant Bouygues, which owns 29% of Alstom, has vowed not to sell its shares until the board has approved an offer.
Alstom chairman Patrick Kron said: "The combination of the very complementary Energy businesses of Alstom and GE would create a more competitive entity to better service customer needs. Alstom’s employees would join a well-known, major global player, with the means to invest in people and technology to support worldwide energy customers over the long term.
Meanwhile, UK-based Rolls Royce Holdings has confirmed Siemens has made a $1.5bn bid for its energy business.
Rolls Royce Holdings is based in Derby and is not part of the famous motoring brand that was sold to Germany's BMW in 1998. It makes large turbines used both for power generating plant and in the aviation sector.
Siemens has submitted a $1.5bn bid for its energy gas turbine and compressors business used in both the oil & gas and power markets. In a statement, the Rolls Royce board said talks "have not concluded and we will make a further announcement in due course."