GE offers to buy shares in two of Alstom's Indian subsidiaries for Rs2,336 crore

General Electric Co (GE) today made a tender offer to buy shares in two of Alstom SA's Indian subsidiaries for a total of Rs2,336 crore ($389 million), after it tabled a $16.9-billion bid for the French power equipment manufacturer's energy businesses.

In a filing with the Indian stock exchanges by the offer manager Credit Suisse, GE has offered to buy 25 per cent in Alstom T&D India Ltd from the public at Rs61.25 a share for a total of Rs1,670 crore ($278 million).

The Connecticut-based company has also offered to buy 26-per cent stake in Alstom India Ltd for Rs 382.20 per share for a total of $111 million.

GE, which aims to generate 70 per cent of its earnings from industrial businesses, will proceed with the tender offers only if its bid for Alstom's energy arm is successful, the filing said.

Alstom currently holds 75 per cent stake in Alstom T&D and 68.6 per cent in Alstom India.

Alstom, based in the outskirts of Paris, last week said that it would consider GE's proposal and has set up a committee of independent directors, led by Jean-Martin Folz, to review the offer before the end of May.

Also in the race is German engineering giant Siemens, which has yet to table a firm bid, but has indicated to Alstom's board that it is proposing an asset-swap deal, to transfer to Alstom some of its high-speed train and locomotive businesses, plus cash, in exchange for Alstom's power business. (See: Siemens barges into Alstom - GE deal with asset-swap offer)

Alstom, which has a joint venture with Bharat Heavy Electricals Ltd in India, has recently been hit hard due to low demand for its new thermal power plants. The company last year announced 1,300 job cuts in order to reduce costs by as much as €1.5 billion by April 2016 and plans to sell assets worth €3 billion to raise cash.

Early last month it struck a deal to sell its heat exchange unit to German private equity firm Triton for €730 million.  (See: Alstom to sell heat exchange unit to German PE firm Triton for $1.01 bn)

It is also under US investigation over alleged bribery in 11 power projects in Indonesia, China and India.

Alstom is a French powerhouse - employing 93,000 people globally, of which 18,000 of them in France.

It symbolises the technological and industrial might of France through its high-speed TGV trains that connect Paris to London via the Eurotunnel, as well as its turbines, which runs one-third of the world's nuclear plants.