GE and Siemens defend rival bids for Alstom

Both companies assured French government they will preserve jobs

Executives from General Electric (GE) and Siemens have presented rival proposals to buy the power arm of Alstom to the French government, both assuring that they will preserve jobs and strengthen the company.

Jeffrey Immelt, chief executive of GE and Christophe de Maistre, who leads the French business of Siemens, were questioned about their plans for Alstom during a recent session of the National Assembly's economics committee.

During the parliamentary hearing Immelt defended GE's €12.35 billion (£10 million) offer for Alstom's energy arm and offered commitments to create 1,000 jobs in France over the next three years, including by opening new sites. It was also considering a tie-up in rail signalling that would give Alstom control of that business.

Immelt said that GE is willing to partner with France's government in a possible alliance.

Details of the potential alliance were not offered, but a spokesman for GE has since said the company is ready to become a partner with French investors – including the government – in offshore-wind and other sectors, but not in steam turbines, which are the core of Alstom's power business.

Hollande's economy minister, Arnaud Montebourg, has previously threatened to block the deal if GE refuses to guarantee that the steam turbine technology stay in France over fears of disruption to the supply of Alstom turbines to state-controlled energy company EDF.

However, Immelt stressed the importance of the sovereignty of the nuclear industry and its commitment to working with EDF.

During the hearing, De Maistre said Siemens hoped to submit its rival offer by 16 June at the latest. The deal would see the transfer of its rail activities and less than €7 billion (£5.7 million) in cash in exchange for its power assets. De Maistre said the deal will create two European industry champions: one in power around Siemens, the other in rail around Alstom.

Siemens is interested in all of Alstom's power assets but would ring-fence Alstom's steam turbines used in nuclear plants to protect France's export ins the atomic power industry, according to reports.

Siemen's would meanwhile hand Alstom all of its trains business, creating a bigger transport group that would be majority owned by France and would have its headquarters there. In rail signalling it would offer to takeover Alstom's business, but also keep the headquarters in France.

Tuesday's parliamentary hearing took place after GE agreed to extend its bid timetable by three weeks until 23 June at the government's request, a letter of intent from Siemens offering to pursue a rival proposal, and a French government decree giving itself an effective veto on any deal.