France is still pushing for improved job and energy security guarantees from two bidders for Alstom’s power-generation business but is treating them equally, the French president’s office said on Thursday.
The French state “has no preference” between the two offers, but wants the terms to be “improved”, the presidency said, referring to the fate of Alstom, a leading French employer and a hot political subject at a time of record unemployment.
The Elysee Palace made the comments after a meeting between President Francois Hollande, Prime Minister Manuel Valls and Economy Minister Arnaud Montebourg.
The statement referred to a concrete offer from US group General Electric, and an offer expected to be firmed up in the next few days from German industrial group Siemens in association with Japanese firm Mitsubishi Heavy Industries.
“We do not have a preference for one or the other proposal.
“We have requirements which concern employment, the continuation of activity in France, and energy independence. It is on this basis that we will look at the situation,” the presidential office said.
“Our aim now is to continue to provide help so that the proposals are improved to serve the different objectives in the best way.”
Another such meeting would be held next week, it said.
Siemens and Mitsubishi said on Wednesday that they had joined up to consider bidding for some of Alstom’s assets and would decide by June 16.
And Japanese firm Hitachi has indicated that it too may become involved.
A report in the Japanese Nikkei business newspaper said that Mitsubishi and Siemens were prepared to bid nearly $10 billion (7.4 billion) for some of the energy assets.
Until then Siemens was believed to be alone in the running to make a counter offer to a bid of $17 billion by GE for Alstom’s power generation business.
Siemens was said to be interested in acquiring the power business and offering its own railway division to Alstom in part payment.
But Alstom has told AFP that it has not yet received any firm offer from Siemens.
Alstom, which depends heavily on contracts from the French government, says it is suffering from low demand for new power stations in Europe.
Its finances are under pressure and it says it is not big enough in the world market for power generation, and so needs to focus on its rail business, although earlier this year it had put part of its rail activities up for sale.
– Prospect of break-up –
GE already has substantial activities in France, some of which are sited side by side with an Alstom factory.
The Alstom management prefers the GE terms, and a source close to the company said that its management was “shocked” at the prospect of its power operations being broken up between Siemens and Mitsubishi.
The GE deal would leave Alstom to concentrate on its other remaining business which is as a world leader in making equipment for railways, including the French high-speed TGV train.
The GE offer is open until June 23, and has been sweetened with the offer to create 1,000 jobs in France.
It was only when the advanced stage of talks between Alstom and GE became public knowledge, that Montebourg reacted angrily, fearing that decision-making would move to the United States and jobs would be lost, and encourage Siemens to show an interest.
Alstom is one of France’s biggest private sector employers with about 18,000 staff nationwide.
The energy unit, which builds generators, turbines and transmission systems and would complement GE’s own power industry division, accounts for 70 percent of Alstom’s business.
About 10 years ago the company, then an even bigger name in French industry, got into severe difficulties and had to be rescued, but was also forced to divest its shipbuilding activities.
The problems around Alstom are seen as being symptomatic of national angst over a decline of industry and falling competitiveness of French business.