General Electric remains the favourite to take over the energy business of French engineering group Alstom, but Germany’s Siemens is still in the race – notwithstanding the competition problems that would bring.
Cash-strapped Alstom needs a tie up with one or the other.
It is currently reviewing the US company’s offer and the German’s have four weeks to decide if they want to make a counter bid.
Alstom workers are nervous about change.
One of them said: “In US companies there’s a culture of competition among the workers and demanding more from those workers, which puts quite a bit of pressure on them.”
Another added: “If I had the choice, I would have preferred Alstom to stay a French company with the decision making done here in France.”
A GE deal would boost its position as a producer of steam turbines for power stations and technology for electricity grids and avoid problems with competition regulators.
Analyst Alastair McCaig with IG explained an Alstom and Siemens merger would means assets would have to be sold: “I think ultimately GE have got this sewn up now. The complexities that would be involved were Siemens to take this forwards make this particularly difficult. The two companies together, Alstom and Siemens would have over 30 percent of the EU energy supply and that would obviously create monopoly issues.”
This is far from a done deal, but the most encouraging thing for the Americans is the softening of tone from French Economy Minister Arnaud Montebourg.
He has vowed to block any moves that meant job losses in France .. and would prefer an “alliance” to a takeover, but is now talking about having “a good relationship” with GE which he has called a “a serious company”.
On the Paris bourse on Wednesday Alstom jumped 9.3 percent as it resumed trading, with a lot of investors having to scramble to buy shares as they had taken short positions – betting the price was going to fall.