India: General Electric (GE)'s acquisition of Alstom is likely to benefit Indian BHEL and Bharat Forge, according to the analysts.
BHEL and Bharat Forge already have ties with GE and Alstom, and they will earn synergy benefits from the $ 16.9 billion global consolidation deal between the companies, reports The Economic Times. Also, after the deal with GE, Alstom is unlikely to form a joint venture with Chinese firm Shanghai Electric, which is BHEL's rival.
"A potential Alstom joint venture with Shanghai Electric could have affected BHEL negatively as the firm depends on Alstom for super-critical boiler technology and Shanghai is a rival with sizeable business interests in India." says in the Kotak Institutional Equities report.
Analysts now believe that the deal between GE and Alstom has been formed to ward off growing competition from Chinese companies in the global arena, and also to emerge stronger by taking advantage of their complimentary business. The deal will also benefit Bharat Forge, which has a joint venture with Alstom for steam turbine.
Source: The Economic Times