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(From left): Mitsubishi CEO Shunichi Miyanaga, Chairman of the board and CEO of the German Group Siemens Joe Kaeser and Siemens France C.O Christophe De Maistre, arrive for a meeting with French President at the Elysee palace on June 20, in Paris. (AFP)
Siemens-Mitsubishi raises Alstom offer Extra 1.2 billion euros on table

PARIS/FRANKFURT, June 20, (RTRS): Siemens and Mitsubishi Heavy Industries added a billion euros to their offer for Alstom’s energy business on Friday, hoping to see off a revamped bid by General Electric ahead of Monday’s deadline for a decision on the struggling company’s fate.
President Francois Hollande, whose government has said it will veto any deal that does not protect jobs and industrial know-how, consulted ministers and the US and German firms’ bosses in talks that could seal the fate of the 86-year-old firm at the centre of one of Europe’s fiercest industrial battles.
In a statement after the discussions, Hollande’s office said Economy Minister Arnaud Montebourg would make public the government’s view at a 5:00 pm local (1500 GMT) news conference.


“I think that a solution will be found for Alstom in coming hours,” Finance Minister Michel Sapin, speaking to reporters during an event in southern France, said separately.
Alstom’s board is due to meet by June 23.
GE radically overhauled its bid on Thursday, hoping to appease unions and politicians by transforming what had been largely a straight purchase into an offer of joint ventures similar to that of Siemens-MHI.
In response Siemens and Mitsubishi Heavy Industries (MHI) simplified the structure of their offer on Friday and raised its cash component by 1.2 billion euros ($1.64 billion) to 8.2 billion.
That values Alstom’s power businesses at 14.6 billion euros, Siemens said, 400 million more than previously and still well above GE’s 12.4 billion.
GE’s cash component in its revamped offer has fallen to an as yet unspecified level since it said it would sell its rail signalling unit to Alstom and set up 50/50 joint ventures in grid, nuclear and renewable assets. Under this proposal GE would still end up with the lucrative gas turbines that account for roughly a third of Alstom’s power business.


Pledges

Siemens said its offer was “superior industrially, financially and socially,” and reaffirmed pledges to create new jobs in France, a commitment GE has also made.
The new Siemens-MHI proposal still foresees Siemens buying Alstom’s gas turbine arm. But MHI is now offering to buy a 40 percent stake in its combined steam, grid and hydro businesses and bundle them into a single holding company rather than three joint ventures, a plan Alstom sources had said was too unwieldy.


Siemens CEO Joe Kaeser told journalists the two partners were open to the French government taking a stake in Alstom if their bid succeeded, but noted such an option had not yet been discussed. Speculation has focussed on whether France’s Bouygues might sell its 29 percent stake.
The nuclear alliance proposed by GE would see the government hold a preferred share, giving it a veto and other rights over issues related to security and technology of nuclear plants - a vital point in France, which relies heavily on nuclear energy.
Alstom reaffirmed that its board would meet no later than Monday to review the offers and that it planned to make no further statement in the meantime.
Paris-based investment house Aurel BGC said it was becoming harder to assess which of the two bids made most sense.


“The government can at least say it has succeeded in upping the stakes but the proposals are becoming complex and more and more difficult to assess,” it wrote in advice to investors.
French Prime Minister Manuel Valls told France Inter radio that the offers of the two sides were improving.
“We have more meetings today to move towards a decision in conjunction obviously with Alstom, because it ultimately must decide,” he said, adding the French government’s criteria were “above all the preservation of strategic interests, preserving a certain number of decision-making centres in France and Europe, and obviously jobs”.
Meanwhile, Turkish markets fell on Friday as rising geopolitical risks pushed oil prices higher after US President Barack Obama said he was prepared to make “targeted” military strikes in Iraq to combat an extremist insurgency.
Market optimism after the Federal Reserve committed to keeping monetary policy loose soured after Obama said on Thursday he would send up to 300 US military advisers to Iraq.
He nevertheless stressed the need for a political solution to the crisis as government forces battled Sunni rebels for control of Iraq’s biggest refinery.
“The lira is the worst-performing emerging market foreign exchange after Obama’s speech on Iraq last night. Turkey’s vulnerability in the most unstable region in the world is clashing with a great environment for emerging market assets,” said Isik Okte, a strategist at TEB-BNP Paribas.
The lira had weakened to 2.1400 against the dollar by 0722 GMT from 2.1290 late on Thursday, while the yield on Turkey’s 10-year benchmark government bond rose to 8.91 percent compared with 8.81 percent at Thursday’s close.


Oil prices rose close to a nine-month high above $115 a barrel on Friday on concerns that heavy fighting could limit oil supply from OPEC’s second-biggest producer.
Turkey purchases 98 percent of its natural gas needs and more than 90 percent of its crude oil from foreign producers. Those imports help swell a current account deficit, considered Turkey’s main economic weakness, that hit $65 billion in 2013.
Turkish Finance Minister Mehmet Simsek said earlier this month that he expected the country’s energy import bill to reach $61 billion in 2014, compared with $56 billion last year.
Turkish markets will also eye the central bank’s monthly survey of inflation expectations among businessmen and economists.
 

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