Alstom’s board accepted a $12bn-plus all-cash offer from GE for its energy arm on Tuesday night, but the engineering group left the door open for a rival bid from Germany’s Siemens in a sale process that could hinge on French politics.
Two people close to the negotiations said Alstom’s decision to accept GE’s offer would not rule out a counterbid. GE also recognises that it has more work to do to assuage French government concerns over jobs at a national champion, they said.
Siemens has said it will make a formal offer amid calls from France’s Socialist government for all parties to take at least a month to consider their options.
The German engineering group wrote to Alstom earlier on Tuesday to say any formal offer would be contingent on it being given access to non-public data on the company over a four-week period.
A person close to the talks said the Siemens letter was more concrete and detailed than the two-page letter that the German group’s chief executive Joe Kaeser sent to his Alstom counterpart on Saturday, proposing the creation of two European champions in energy and transport.
The developments came as Siemens closed in on a separate agreement to buy part of Rolls-Royce’s energy division, which makes small turbines for the oil and gas industry, for up to ￡1bn.
Alstom makes turbines for electricity generation, including for France’s nuclear industry, and is a key supplier of TGV high-speed trains and other transport equipment.
Alarmed by the prospect of a sale of the Alstom energy business to GE, members of President Fran?ois Hollande’s government intervened last week in an effort to protect what they see as a strategic industrial asset.
One official said that the government wanted a better deal for Alstom. “GE needs to improve its offer,” the official said before details of GE’s bid emerged, saying Jeffrey Immelt, chief executive of GE, understood French concerns about losing what industry minister Arnaud Montebourg has called a national “industrial jewel”.
Mr Montebourg has clearly signalled a preference for the Siemens approach, accusing Alstom’s chief executive of “a breach of national ethics” for attempting to negotiate a deal with GE behind the government’s back.
Senior officials insist the government is not favouring either bidder but is concerned to ensure that jobs, core French operations and France’s energy independence are preserved.
One senior French industry executive said that he was still not ruling out a “third surprise option” that presents Alstom with a French solution, with EDF, Safran and Areva all being mooted as potential partners.
Additional reporting by Mark Odell in London