MHI, Siemens sweeten Alstom bid

Mitsubishi Heavy Industries (MHI) and Siemens have sweetened their joint bid for parts of Alstom's energy business, raising their combined cash contribution by €1.2bn ($1.63bn) to €8.2bn.

The new offer increases the total valuation of Alstom's energy business by €400m to €14.6bn, the German and Japanese companies said in a joint release.

The bid continues to leave out Alstom's renewables activities such as wind turbine manufacturing.

The revised German-Japanese offer comes less than 24 hours after GE unveiled its own revised proposal for Alstom, including a joint venture in offshore wind and hydro.

Alstom said its board of directors will be convened no later than Monday, June 23, "to review and resolve upon the updated offer of GE and the proposal of Siemens and Mitsubishi Heavy Industries".

Before that, Alstom does not intend to comment further on the ongoing process.

If Alstom were to agree to the improved bid, it would remain as a €20bn-revenue French listed group, while the proposal preserves Alstom' perimeter in almost all its activities, enhances its industrial sustainability and strengthens its financial structure, Siemens and MHI say.

Under the new bid, MHI would intend to buy a 40% stake in the combined, steam turbine, grid and hydro business of Alstom, which would increase its cash contribution by €800m to €3.9bn, while the valuation of the underlying businesses remains unchanged.

That simplifies a possible transaction as now MHI's investment may be carried out through one single holding company as opposed to three JVs as was contemplated in the previous proposal from June 16.

Siemens is increasing its part of the cash offer by €400m to €4.3bn.The Munich-based company had previously said it wants to buy 100% of Alstom's gas turbine operations.

Also, in addition to the proposed letter of intent for the rail business, Siemens offers to enter immediately into a joint venture for mobility management including signalling between Alstom and Siemens.

"MHI and Siemens continue to firmly believe that their proposal is the best one for Alstom, its employees, its clients, its shareholders and French national interests. Such proposal is superior industrially, financially and socially," the companies say.

The Japanese-German bid continues with its offer to create create up to 2,000 new jobs in France, including 1,000 apprentices to be hired by Siemens.