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Siemens-Mitsubishi rival GE’s bid For Alstom takeover

With Siemens-Mitsubishi  putting up a competitive bid of Euro 9 billion (US $ 12.3 billion) for Alstom’s turbine business, the French government is asking the US energy giant GE to up its bid from the current US $ 12.4 billion for Alstom’s energy business to match the rival Siemens-Mitsubishi joint bid.

Alstom’s power business taken over by either GE or the Siemens-Mitsubishi conglomerate would also impact the French engineering firms’ Indian operations. Though the Alstom Projects India Ltd (APIL) is a 100 per cent owned subsidiary, the takeover will affect many of the joint ventures it has with state-owned companies.

Alstom has a joint venture with the state owned BHEL for transfer of technology in making super critical boilers. BHEL has similar joint ventures with Siemens for making steam turbines and with GE for making gas turbines. It’s a win-win situation for BHEL in terms of adopting frontline technologies in the spheres of critical functioning of the power sector – turbines and boilers.

Alstom survived greatly on its transport business worldwide and also in India. Alstom was the first to do the signalling and train communication contract for over Rs 600 crore for line one of Delhi Metro Rail Corporation. But subsequently it lost line two and three to the German competitor Siemens.

With orders flowing from Australia and rest of the world, Alstom covered up its losses by using its Baroda facility in India to outsource power equipment for projects. Alstom again made up for its losses in the transport business when it bagged the Chennai Metro project. Alstom was also responsible for doing a major rejig on the Shatabdi and Rajdhani coaches for the Indian Railways through its German acquisition LinkeHause and Busch (LHB) to make it world class.

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