Alstom has until June 23 to decide on the GE offer for takeover. But it seems that either the French government or the EU anti-trust commission would be able to beat back the GE push despite the Alstom board being favourable to the GE offer.
Alstom has said that it would open its books to Siemens just as much as it did to GE, not more. But the Siemens offer would likely exclude the train division that would function as an independent French entity.
The French government is inclined toward Siemens largely for political reasons. The current Hollande regime has been wary of foreign owners and it sees Siemens as more politically acceptable. Arcelor Mittal had to face a tough music from French trade unions as well as the government for its steel plants in France.
GE is reportedly offering that the solar and hydro business could be hived off with French co-ownership, while the wind business that Alstom built after buying the Spanish firm Ecotechnia could stay in France as an Areva operation.
Over 70% of Alstom’s business comes from power and the fate of its gas and steam turbines, boilers and HRSGs hang in balance. Since GE was more a gas turbine-compressor player the synergies with the boiler-steam turbine maker that is Alstom can be substantial. With Alstom in its kitty, GE would have been able to make bundled offerings leveraging Alstom’s project management expertise. A GE combined cycle offering would be a lot more competitive.
But it’s precisely these bundles that could be a problem and face trust questions. GE’s last major attempt at takeover was in the early 2000s when it attempted to buy Honeywell. Anti-trust authorities in Brussels put paid to that attempt by decreeing that GE’s aircraft engines bundled with Honeywell aviation electronics would be monopolistic.