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.

Agence France-Presse

June 23, 2014

2 min read

Germany Shrugs Off Criticism Over Siemens Failed Alstom Bid

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."

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

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