GE is attempting to explore other avenues in order to facilitate a final deal on Alstom and is in early-stage talks with nuclear-plant maker Areva SA (AREVA) and other French companies about asset sales or partnerships.
That’s according to a report in Bloomberg, which quotes unnamed insiders close to the negotiations as saying that the management at GE are potentially looking at selling some assets in order to win over the French government.
The US company is exploring concessions, including entering ventures in areas from nuclear power to wind-turbines to rail signalling, while it seeks clarification on what would appease the state, they said.
French companies have been contacting GE in anticipation of the government asking for asset sales or partnerships before approving the deal, though GE would prefer not to sell anything, a person said.
GE chief executive Jeff Immelt wrote to President Hollande pledging readiness to work with the state, Areva and EDF to protect the nuclear sector and preserve France’s exports. He also said GE would study potential French bids for Alstom (Euronext: ALO) onshore and offshore wind business, and welcome local investors in the capital of Alstom’s unit that makes turbines for dams.
Meanwhile Siemens AG (SIE) is weighing a possible counterbid for Alstom’s thermal, renewables and grid operations, which make and service products from gas turbines to power transmission equipment. The Germany-based company may decide as early as this week on an improved offer, having examined Alstom’s books. They are also said to be lining up a more attractive offer than initially made.
Areva, the world’s biggest reactor-fuel supplier, may be at the centre of any resolution for GE. For Areva, which is merging its unprofitable offshore wind turbine business with Spain’s Gamesa Corp. Tecnologica SA to share costs, buying Alstom’s offshore wind business would eliminate a rival that was selected by Electricite de France SA for a 2 billion-euro ($2.7 billion) contract to supply three wind farms in the country.
If that deal goes through Areva may opt to halt development of Alstom’s 6 MW offshore wind turbine, which has no gearbox, in parallel with its own 5-MW and 8 MW turbines using a gearbox to increase rotation speed and yield. That would also have an impact on plants and supply chains that Areva and Alstom both have pledged to build in France to win offshore wind tenders held by the state.
The government, EDF and Areva want to make sure that GE will continue to provide adequate maintenance services for Alstom’s steam turbines used in the non-nuclear part of France’s 58 atomic reactors, people familiar with the matter said. They also want to make sure that GE won’t block export of these turbines when French nuclear companies team up to bid for tenders abroad, they said.
Montebourg is pushing GE to sell its locomotive division to Alstom to strengthen the French company’s transport business, but insiders say the US company will not be prepared to go to those lengths to win the bid.