Munich, Germany (4E) – Siemens AG is expected to make a bid for Alstom SA’s energy division for a deal that would allow the company to acquire the French company’s gas turbines while helping partners Hitachi Ltd. and Mitsubishi Heavy Industries Ltd. by boosting their hydro and steam turbines businesses, according to sources with knowledge of the negotiations.
Munich-based Siemens would purchase Alstom’s gas-turbines business and the French firm could use part of the proceeds for investments or give back to its shareholders, according to the sources who requested not to be identified as the discussions are still private.
If successful, the deal would see Hitachi, Mitsubishi Heavy and Alstom merge their hydro and steam turbines assets, with the Japanese firms taking a minority stake in the venture, the sources said. A deal could get announced as early as Monday.
Rival bidder General Electric Co. may be prompted to raise its current $17bn offer for Alstom’s energy assets as a result of the bid by Siemens, Mitsubishi Heavy and Hitachi.
The deal could also potentially lead to the creation of a European transport group through the combined rail assets between Siemens and Alstom, the sources said. Siemens’ board was scheduled to meet Sunday and approve the plan, the people said.