Alstom Shares Jump 10% on GE and Siemens' Interest in its Energy Unit

The board of Alstom has accepted General Electric's (GE) €10bn bid for its energy unit.

The troubled French engineering conglomerate also expects to receive a rival offer from its much larger German competitor Siemens.

Alstom is not in exclusive talks with GE and is expected to make a statement about the two offers on 30 April, Reuters reported.

The company's stock was trading 10.61% higher to €29.86 at 09:08 hrs in Paris .

The rival bids have sparked national debate about the fate of power turbine and train manufacturing in France - both integral to the nation's engineering lineage.

The French government reportedly favours the Siemens offer.

Earlier on 29 April, Siemens said it would make an offer to Alstom to scrutinise the French firm's books and draft a detailed plan, to match GE's moves.

GE Offer

GE chief executive Jeffrey Immelt has told French President Francois Hollande that an acquisition by GE will boost employment in France. Global headquarters for several key divisions, including hydro power, offshore wind and steam turbines will be based on French soil.

GE is also keen on working with the French government, utility EDF and nuclear group Areva to protect France's strategic nuclear sector and its exports.

The American firm also proposes to sell Alstom's wind turbine business to French investors.

GE has also offered France a representative for its board, and will explore the possibility of a transportation joint-venture with Alstom's remaining transport activities, believed to be too small to subsist independently.

Analyst and Investor Take

Many analysts and investors believe the Siemens move is primarily defensive.

Rob Virdee, an analyst at Espirito Santo Investment Bank, told Reuters the Siemens' offer appeared like a defensive move – one designed to prevent GE's expansion in Europe.

Alstom and Siemens have a history of competing against one another.

An industry insider told Reuters that no one at Alstom wants a deal with Siemens because they remember how Siemens petitioned aggressively against state aid for Alstom when it almost went bankrupt in 2004.

An unnamed fund manager said a deal will mark a sharp turn for Alstom and that Siemens will need very good arguments to defend its move strategically.

"Until last week, Alstom was seen as dead, and its products were not thought to be competitive," the fund manager added.