Siemens CEO in Alstom talks
Siemens executives will meet with French politicians today after the German industrial giant confirmed its willingness to talk about a link-up with France’s Alstom, a Siemens spokesman at headquarters in Munich told Recharge.
If the deal goes through, it would give Siemens an even greater global lead in the offshore wind business and turbo-charge its onshore portfolio.
“Siemens has submitted a letter to the board of Alstom to signal its willingness to discuss strategic questions of a future cooperation,” the company said in an official statement, adding that it would not make any further comment at this point.
Siemens reacted to press reports that it has proposed a deal to buy Alstom’s energy, grid and renewables divisions to thwart a takeover of Alstom by US rival GE.
Industry sources said Siemens chief executive Joe Kaeser will meet the French politicians. According to German newspaper Der Tagesspiegel, the meeting will be with French President François Hollande and his economics minister Arnaud Montebourg, who will also meet GE’s top management.
Montebourg is reported to have asked Siemens to make a counter-bid to avoid an American take-over of Alstom and instead create two European “champions", one in energy and one in transport.
The sources also confirmed that Kaeser in a letter to Alstom CEO Patrick Kron signalled wide-ranging concessions to the French in a possible transaction, such as a three-year job guarantee for French Alstom staff, and ceding Siemens high-speed train business to Alstom. Siemens produces Germany’s ICE high speed train, while Alstom makes the French TGV bullet train.
In exchange, Siemens would pay some €10bn ($13.87bn) to €11bn for Alstom’s power plant, energy grid and renewables divisions, Kaeser is said to have written in the letter.
Siemens is also willing to find a compromise in the area of nuclear energy, which is a strategic technology for the French, while Siemens had abandoned the nuclear sector already in the wake of Germany’s nuclear exit.
Siemens didn't deny the veracity of the letter.
Alstom told Recharge that it continues in strategic considerations, and plans to make an announcement before April 30. In the meantime, the company has asked for its shares to remain suspended from trading.
Kaeser in February already had tried to discuss a cooperation with Alstom, but CEO Kron then reportedly had shown little interest.
If Siemens were to take over Alstom’s energy assets, it would cement its global leadership position in offshore wind turbines, although there would be some overlap in the companies’ turbine portfolio.
Alstom currently is building manufacturing sites in France for its 6MW Haliade offshore machine, for which it already has a 1.4GW order pipeline from French offshore tenders.
While the portfolio certainly would be a welcome boost to Siemens’ own vast offshore portfolio, the German company already has its own 6MW offshore model that it installed commercially at Dong’s Gunfleet Sands wind farm off England last year.
In onshore wind, Alstom would give Siemens a bigger presence in some key emerging markets such as Brazil, where Alstom is a major rival to GE.
Alstom rivals Siemens in HVDC offshore grid links after transmission system operator TenneT TSO last year awarded the 900MW DolWin 3 link in the German North Sea to the French conglomerate. Siemens has won most other major German offshore bids.