France, Levallois-Perret: Siemens is preparing a formal asset-swap offer for Alstom's power business this week.
Alstom is currently negotiating with U.S. conglomerate General Electric over a $ 16.9 billion bid for its power business, but under strong political pressure, it has given an opportunity to Siemens, reports Reuters.
Some sources doubt that Alstom would be interested in the Siemens, however, a rival offer would give the French government more leverage with GE after it blocked foreign takeovers in "strategic sectors“.
The French government is favouring an alliance between the companies rather than a straight sale of Alstom's power business accounting for 70 % of the group's revenue. It has advocated an alternative European tie-up between Alstom and Siemens.
"Siemens is presenting the following case: it will create national champions in trains and energy. Everything will be kept in Europe. It has offered some new elements, which sweeten its proposal." said a source familiar with the proposed deal.
Siemens had outlined a proposal worth $ 14.5 billion, which includes exchange of part of its rail business as well as cash in exchange for Alstom's power assets. The company is also offering to set up the headquarters of sub-units in Transmission and Distribution in France - the segment which manufactures gear to carry electricity from power plants to households.
Siemens as well as Alstom have declined to comment. Alstom said it was reviewing GE's bid and had received an expression of interest from Siemens, but no formal offer.