A bidding war for French engineering giant Alstom heated up on Friday with Siemens of Germany and Mitsubishi Heavy Industries (MHI) of Japan raising their joint bid by millions of euros.
The raise came just a day after the other bidder, US multinational General Electric, had sweetened its offer. Alstom makes turbines for electricity generating stations and high-speed trains.
“The total valuation of Alstom’s energy business increases by €400 million to €14.6 billion,” the German-Japanese consortium said in a statement. They added they were increasing the cash component of the bid by €1.2 billion.
In April, GE offered €12.35 billion ($16.8 billion dollars) for the entirety of Alstom’s energy activities, which accounts for the bulk of the French heavy industry group’s revenues.
The offers are not directly comparable, as the Siemens-MHI offer is differently structured, with Siemens paying cash to acquire the French group’s gas turbine factories while MHI buys into the group.
In their initial offer on June 16, MHI had proposed three joint ventures with Alstom in steam, grid and hydropower for an investment of €3.1 billion. Friday’s simplified offer foresees a single joint venture, in which MHI would have a 40-per-cent stake worth €3.9 billion.
“With the specified offer, MHI and Siemens reaffirm their commitment to strengthen Alstom as an independent global player in energy and transport,” the bid announcement said.
The French government initially seemed keen on Alstom forming an alliance with Siemens, but since MHI joined the field on the Siemens side has insisted it has “no preferences.” Alstom’s board of directors, which has shown partiality towards GE, has until June 23 to decide on which offer it prefers.
In the bid adjustments, both Siemens and GE offered to hand over their railway signalling businesses to Alstom.
President Francois Hollande of France was to meet on Friday afternoon with the chiefs of GE, Siemens and MHI.