Siemens look on the bright side as France sells GDF stake

Siemens chief Joe Kaeser is taking a positive view of his company’s failure to secure a deal to buy French power equipment manufacturer Alstom.

Meanwhile, it has emerged that France sold a €1.5 billion ($2 billion) stake in GDF Suez SA (GSZ), the country’s largest natural gas distributor, as it seeks cash to buy a holding in Alstom Alstom (Euronext: ALO).

Last weekend General Electric – competition authority notwithstanding – secured a deal to purchase Alstom, with the acquisition involving a significant stake for the French government in order to go through.
Joe Kaeser
Kaeser told Siemens employees that “the implementation of this deal will keep our two competitors busy for years to come. And having the French government as a major shareholder will ensure that any US-style productivity and restructuring measures will be extremely difficult to get done . . . This alone was worth fighting for.”

GE described Kaeser’s claims as “good spin from the losing bidder”, adding that the overall industrial logic of the deal remained “fully intact”. Of the synergies between Alstom and GE, 86 per cent will materialize outside the joint ventures that are part of its revised offer, according to the US-based company.

GE also denied that it raised the value of its offer, as Siemens claims, though it was obliged to agree to a more complicated joint venture structure and accept the French government as a shareholder.

It is expected that GE will now pose a greater challenge to Siemens in the grid and offshore wind sectors, while cementing its domination of the gas turbine market, subject to antitrust authorities granting their approval.

The French state’s decision to offload some of its interest in GDF Suez is a by-product of the Alstom deal. France offloaded 3.1 per cent, trimming its holding to 33.6 per cent, Finance Minister Michel Sapin and Economic Minister Arnaud Montebourg said in a joint statement.

For more on this evolving story

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