Germany Shrugs Off Criticism Over Siemens Failed Alstom Bid

Germany Shrugs Off Criticism Over Siemens' Failed Alstom Bid

Germany's government rejects criticism that it insufficiently backed industrial giant Siemens in a bidding war for a stake in France's Alstom, which opted for U.S. rival General Electric's offer instead.

BERLIN -- Germany's government on Monday rejected criticism it had insufficiently backed industrial giant Siemens (IW 1000/) in a bidding war for a stake in France's Alstom (IW 1000/169), which opted for U.S. rival General Electric's (IW 500/6) offer instead.

Chancellor Angela Merkel's spokesman said "in principle, as we have repeatedly said, decisions about possible industrial cooperation are the responsibility of the enterprises involved."

France said Sunday it would take a 20% stake in Alstom, while the engineering conglomerate has accepted GE's 12.35-billion-euro ($16.8 billion) offer for its energy business.

The French government, which had earlier encouraged a Siemens bid, said Friday it favored GE's bid over Siemens' joint offer with Japan's Mitsubishi Heavy Industries (IW 1000/140).

Merkel's spokesman, Steffen Seibert, said on Monday: "The French government has made clear that from its point of view the public interest of France is affected, which is why it acted the way it did."

Earlier Monday, the chairman of the German parliament's economic affairs committee, former transport minister Peter Ramsauer, charged that Berlin had done too little to support the Siemens offer.

Ramsauer also accused Paris of "placing French unilateral interests ahead of European interests" by choosing a U.S. partner, and of ignoring its public debt problems by buying a 20% stake in Alstom.

Siemens chief Joe Kaeser meanwhile said the main reason its offer had failed was opposition from Alstom chief executive Patrick Kron, adding however that the door remained open for further talks.

"We made what was clearly the better offer in terms of jobs, price and future perspective for French and European industry," Kaeser said.

He said Kron had "determinedly fought" the German bid, and that Siemens "could not and did not want to" continue its bid in the face of such opposition.

Siemens a 'Satisfied Loser'

Kaeser also expressed satisfaction that the bidding war had driven up the price and made the deal less attractive for the U.S. giant, saying that "of all the possible outcomes, we achieved the second-best."

"Our competitor wanted to buy all of Alstom's energy business for a bargain price of about nine billion euros," he said. "This has turned into over 12 billion euros. Also, the French state has stepped in as the main shareholder with 20%. A highly complex business structure is being created. All of this wouldn't have turned out this way without us."

The Muenchner Merkur daily said: "One could get the impression that the Munich corporation (Siemens) is not just a good, but quite a satisfied, loser."

Revealing some of the terms of the deal with GE, France's Economy Minister Arnaud Montebourg said the U.S. group and Alstom would pay penalties of 50,000 euros for every job out of the 1,000 promised that it fails to create.

"General Electric has offered to create 1,000 jobs in three years. We have asked for engagements, with financial penalties, to the order of 50,000 euros for each job that has not been created," said Montebourg.

"For the first time, a global company agreed to make engagements with penalties if it fails to meet its promises," Montebourg said. "That's a precedent, and it should become an example to follow."

Alstom shares slipped 0.11% in Paris to 27.97 euros, shedding early gains.

Brokers Aurel BGC said that the formula agreed for the government to buy Alstom shares from conglomerate Bouygues was unnecessarily complex.

At Bank of America-Merrill Lynch, analysts said that the market might not like the deal for the French state to acquire a fifth of Alstom.

By Frank Zeller

Copyright Agence France-Presse 2014

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