Mitsubishi Heavy Industries and Siemens are planning a 1 trillion yen ($9.8 billion) joint bid for Alstom's gas and steam turbine operations that would leave each with a piece of the French group's energy business.
Siemens has recruited Mitsubishi Heavy as partner in hopes of countering an offer from General Electric. Alstom finds itself at the center of a tussle involving some of the world's biggest industrial conglomerates.
Mitsubishi Heavy and fellow Japanese group Hitachi would form a joint venture that would seek to buy the steam turbine segment for 500 billion yen. Mitsubishi Heavy would own 65% of the venture, with Hitachi holding the remaining 35%. German powerhouse Siemens would pay 500 billion yen for Alstom's gas turbine business. Alstom's grid business would not be part of the deal.
In a statement Wednesday, Mitsubishi Heavy and Siemens said they "have joined forces in evaluating a potential proposal for certain assets" of Alstom. They would present an offer to the company's board by next Monday.
Mitsubishi Heavy's energy business takes in 1.25 trillion yen in annual sales; Siemens', 3.5 trillion yen. Alstom's energy business is thought to generate 2 trillion yen in revenue, the addition of which would bring Mitsubishi Heavy and Siemens closer to GE's roughly 5 trillion yen.
GE is offering 1.7 trillion yen for Alstom's thermal power generation systems, power transmission equipment, and renewable energy businesses. Should GE come away with all three segments, Japan's Toshiba may then buy the grid equipment business from the American conglomerate.
Mitsubishi Heavy and Siemens agreed last month to merge their steelmaking equipment businesses. When it comes to turbines, they see merits to a joint bid for Alstom's assets. Mitsubishi has strength in high-output turbines, while Siemens excels in the commodity-grade segment of the market and has numerous bases in emerging economies. Together, they reckon they can hold their own against GE.
In the joint statement Wednesday, Mitsubishi Heavy President Shunichi Miyanaga said that "we firmly believe that we can substantially contribute to a partnership solution for Alstom which will create value for all parties involved, including the country of France."
Siemens CEO Joe Kaeser said: "I appreciate (Mitsubishi Heavy's) commitment to join our efforts and I do look forward to working together."