Canadian Manufacturing

Mitsubishi, Siemens mulling US$9.8B joint bid for France’s Alstom

Alstom favours GE's $17-billion bid, but the French government has resisted the deal and sought rival offers



TOKYO—A possible bid by Mitsubishi Heavy Industries for turbine businesses of French engineering firm Alstom is part of Japan’s effort to carve out a share of the lucrative global energy infrastructure business.

Mitsubishi and German rival Siemens AG are considering a joint bid for parts of Alstom.

Mitsubishi Heavy is Japan’s largest heavy machinery maker with $32 billion in annual revenue. It makes ships, engines, nuclear power plants and weapons for Japan’s defence ministry.

Reports indicate Siemens and Mitsubishi Heavy Industries have separate plans for the assets they’d acquire under the joint bid.

The financial newspaper Nikkei reported June 11 that Mitsubishi Heavy Industries and Hitachi, which merged their thermal power generation systems businesses in February, would set up a new joint unit to incorporate Alstom assets. Mitsubishi would own 65 per cent and Hitachi 35 per cent, the same ratio both hold in their combined business, Mitsubishi Hitachi Power Systems, Ltd.

Mitsubishi CEO Shunishi Miyanaga said his firm can “substantially contribute to a partnership solution for Alstom which will create value for all parties involved, including the country of France.”

The report put the value of the potential acquisitions by Siemens and the Japanese companies at 1 trillion yen (US$9.8 billion).

Mitsubishi would purchase Alstom’s steam turbine business while Siemens would buy its gas turbines assets. However, Mitsubishi issued a statement saying that details of the acquisition were still under discussion.

It said Mitsubishi would purchase Alstom’s steam turbine business while Siemens would buy its gas turbines assets.

Alstom has favoured a $17 billion bid from U.S. company General Electric, but the French government has been resistant to the deal and sought rival offers.

Alstom’s board is to make a decision by June 23.

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