PARIS (The Deal) -- Germany's Siemens will team with Japan's Mitsubishi Heavy Industries Ltd. to bid for Alstom SA's energy business, joining forces to counter a 11.4 billion euros ($15.4 billion) offer from General Electric (GE).
The partnership, announced Wednesday, adds a new twist to the battle for control of the French company's turbines and power grid operations, which are seen by both sides as critical to gaining the necessary economies of scale in the European market for equipment used by power utilities.
"MHI [Mitsubishi] has been invited by Siemens to join forces and 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," Mitsubishi President and CEO Shunishi Miyanaga said in a statement.
Siemens and Mitsubishi gave no details of how the partnership would operate or what form their offer would take but promised to submit a bid to the Alstom board by June 16, in line with a timetable established in May.
The partnership could serve to break up Alstom's turbine operations, with Siemens likely to end up with the gas turbine operations while Mitsubishi takes over the steam turbine and grid operations. That would allow Siemens to skirt likely EU antitrust issues linked to the dominant position that a combined Siemens and Alstom would have had in the European market for turbines.
It could, however, count against the German company's bid with the French government, which had been sold on the idea that Siemens' acquisition of Alstom would create a European energy champion.