Mitsubishi, Siemens consider joint bid for Alstom units
They have separate plans for the assets acquired under the joint bid.
TOKYO — The 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 said they are considering a joint bid for parts of Alstom and will decide by June 16 whether to pitch it to Alstom’s board.
Mitsubishi Heavy is Japan’s largest heavy machinery maker with $32 billion in annual revenue. It produces ships, engines, nuclear power plants and arms 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 Mitsubishi Heavy Industries and Hitachi, which merged their thermal power generation systems businesses in February, would set up a new joint unit to incorporate the Alstom acquisition. Mitsubishi would own 65% and Hitachi 35%, the same ratio both holds 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 ($9.8 billion).
It said 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 US 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.
Mitsubishi Heavy Industries, founded in 1884, employs more than 80,500 people. It and Hitachi have led Japan’s effort to gain an edge in the energy systems industry dominated by GE and Siemens.