April 30 - France's Alstom will review a binding offer from General Electric for its energy business. But as Hayley Platt reports it has left the door open for a competing bid from Germany's Siemens.
It's not all hot air - an Alstom deal with General Electric is a real possibility. The French engineering firm has confirmed it's considering a near $17 billion offer from the U.S. giant for its energy business. It's by no means a done deal. Alstom has left the door open to Germany's Siemens and they may make a counter bid. But IG's Alastair McCaig says they'll find it hard. SOUNDBITE: Alastair McCaig, analyst, IG, saying (English): "I think ultimately GE have got this sewn up now. The complexities that would be involved were Siemens to take this forwards make this particularly difficult. The two companies together, Alstom and Siemens would have over 30 percent of the EU energy supply and that would obviously create monopoly issues which would ultimately see Siemens or Alstom needing to strip off assets and sell them and that makes this deal look unlikely." The French government - struggling with a weak economy - will veto any offer it doesn't like. But Economy Minister Arnaud Montebourg isn't against a deal - under certain job-protecting conditions. (SOUNDBITE) (French) FRENCH ECONOMY MINISTER ARNAUD MONTEBOURG SAYING: "We are ready to discuss alliances, not an absorption. We prefer an equal, capitalistic alliance." Cash-strapped Alstom says it would use money from any sale to boost its transport business. It makes high speed trains, among other products, and is a global leader in the field. It will also pay down its debt and return cash to shareholders. But France is keen to retain energy independence and that could be a problem. Robert Cole from Reuters Breakingviews also thinks there could be an element of GE wanting to keep up with the current global trend for mergers and acquisitions. (SOUNDBITE) (English): ROBERT COLE, ASSITANT EDITOR, REUTERS BREAKINGVIEWS, SAYING: "I think it's perfectly possible that this could end up with nothing happening at all because of the nature of the political and competition issues that are raised. I think it's quite possible, perhaps 50 percent possible, that in six months time we look back at this and we say well actually what was all the fuss about." Siemens has other turbines turning too. It's talking to Britain's Rolls Royce about buying its gas turbine and compressor business. It will also present a new strategy next week and now has until the start of next month to make a counter bid for Alstom.