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Takeover target Alstom's profit drops, potential suitor Siemens also weak


Takeover target Alstom's profit drops, potential suitor Siemens also weak


Alstom suffered a drop in orders and annual profit last year.

The numbers show why the French industrial engineering group needs a deal with US conglomerate General Electric to secure its future.

The maker of power generating and transmission equipment, as well as trains and trams, is currently reviewing an offer from GE for its energy business.

But chief excutive Patrick Kron said the door remained open to a possible deal with Germany’s Siemens: “There is no offer from Siemens today. There’s just one offer (GE’s) on the table. But Siemens has expressed, that is it has indicated its interest. If that interest evolves into an offer, we’ll examine it. And we will examine this offer by comparing it to what’s already on the table, and we’ll consider the interests of all the parties involved.”

The French government has repeatedly tried to weigh into the talks with GE, in an effort to protect jobs and plants in what would be France’s biggest ever takeover by a US company.

Kron said it was legitimate for the government to comment on the talks, but stressed the need for a quick fix for the group’s problems as uncertainty risked hurting Alstom’s business and staff morale.

“My goal is to ensure the process is serene, rigorous and transparent, but also that it doesn’t drag on for too long because in the end it would take a toll on the company and its employees,” he told reporters.

At the same time Alstom’s potential suitor – German engineering giant Siemens – posted weaker-than-expected quarterly earnings, unveiled a long-awaited restructuring.

CEO Joe Kaeser stressed Siemens is not going to get into a bidding war for Alstom’s energy assets: “We got the opportunity to have a look into the assets for four weeks and then we’ll be deciding whether or not we make an offer for something. We are pretty cool about the process and we are not transferring the old Roman gladiators into the modern Paris.”

Siemen’s overhaul includes refocusing parts of the business and streamlining management.

Analysts say much work is needed for it to catch up with more profitable competitors and an Alstom deal might be too much of a distraction.

Kaeser said he had discussed a possible combination with German Chancellor Angela Merkel, whose government has sent positive signals about it, and would not be considering an offer for the Alstom business unless he was serious.

But he made it clear that he would insist on full control of any assets it purchased — perhaps a reference to France’s desire for job guarantees.

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