Siemens in talks with Mitsubishi for joint bid for Alstom
12 June 2014
German engineering giant Siemens is discussing a joint bid for energy assets of France's Alstom with Mitsubishi Heavy Industries, a move which could help the German firm overcome antitrust hurdles, Reuters reported.
In April, Siemens had barged into Alstom's late-stage talks to sell its energy assets to General Electric Co (GE) by proposing an asset swap deal worth $14.5 billion. (See: Siemens barges into Alstom - GE deal with asset-swap offer).
As a deadline loomed for Siemens to submit an offer for the company's assets, the Munich-based firm and its Japanese counterpart issued a joint statement saying they would decide on a possible bid by Monday.
In the event Siemens joined forces with Mitusbishi, the German company would get additional muscle and capability as it worked out the best way to challenge the $1- billion bid for Alstom's power activities by US conglomerate General Electric.
According to an earlier Bloomberg report, one option being discussed was for Mitsubishi to bid for Alstom's steam turbine and power grid businesses, while Siemens acquired its gas turbine division. Coal and nuclear power plants use steam turbines while gas turbines go into gas powered plants.
According to commentators, the move could go a long way in addressing concerns in Brussels about the dominant position of a combined Siemens and Alstom energy business, especially in power grids.
Siemens was already a close second to Switzerland's ABB in the global market for high voltage direct current transmission gear, which finds application in long-distance power lines and all offshore wind parks.
Meanwhile, Mitsubishi Heavy Industries (MHI) had taken a majority stake in the Siemens' metal technologies subsidiary VAI, based in Linz in Austria (Siemens, Mitsubishi in metals alliance). Under the deal, a new company would be set up in the UK, which would be owned 51 per cent by MHI and 49 per cent by Siemens when the new joint venture agreement took effect in 2015.