Siemens/MHI Alstom bid 'not enough'

The French government on Tuesday made it known that it is still unhappy with all offers on the table for Alstom, in response to Siemens and Mitsubishi Heavy Industries’ claim that their joint bid for Alstom’s energy business is superior than GE’s.

Presenting their "concept" for Alstom, the chief executives of Siemens and MHI confirmed earlier today that under their plan the Wind and Renewables operation of Alstom would remain 100% under the control of the French company

Talking to the media, there was also a strong signal that the proposal set out today may be the best they are prepared to come up with.

Japan's MHI – which already has an offshore wind joint venture with Vestas of Denmark – will inject cash to take minority stakes in the Steam Turbine, Grid and Hydro units of Alstom, as well as seeking to buy 10% of the entity as a whole.

Siemens would take 100% of the gas turbine operation of Alstom under the €7bn ($9.5bn) proposal, which the two partners said places a net equity value on Alstom Power of €14.2bn.

MHI and Siemens claimed that beats the value of the rival offer from GE by €1.9bn.

But after meetings with Siemens and MHI, sources within the French government told the press that no bid is yet good enough.“The offers must be improved,” Reuters quotes a source within French President Francois Hollande’s office as saying.

Asked about the reports that the French government is already seeking an improvement to its offer, Siemens CEO Joe Kaeser said: "We have a very comprehensive concept.

"So why would a superior offer be improved if it is already superior?"

The two were at pains to stress that their proposal leaves whole swathes of Alstom’s operations under French control.

Kaeser said: “It is a myth that Siemens and Mitsubishi will want to dismantle Alstom,” claiming that if accepted the outcome would be a “more powerful industrial icon in France”.

Between them the two partners said they would create up to 2,000 new jobs in France, including 1,000 apprentices to be hired by Siemens.

The pair have also met unions to discuss guarantees on jobs.

Amid reports that GE will return with a revised offer for Alstom, there was evidence that the US company is also aware of the need to win hearts and minds in France.

The US group has launched an advertising campaign around the theme "tomorrow will be made in France".

GE has given the Alstom board until 23 June to consider its original bid.