Siemens chief won’t be forced into Alstom bid

Suzie Neuwirth
GERMAN engineering giant Siemens yesterday unveiled a long-awaited strategic overhaul of the business and said it would not be forced into a bidding war with US rival General Electric for the energy assets of France’s Alstom.

Siemens has been working on a restructuring plan after issuing a series of profit warnings last year, which led to chief executive Peter Loescher being pushed out and replaced with Joe Kaeser.

The company is streamlining its organisational structures and consolidating its divisions from 16 to nine.

It said healthcare “will be separately managed in the future”. The overhaul is expected to increase productivity by €1bn (£820m) a year, to be fully effective by the end of the 2016 fiscal year.

Siemens is considering a formal offer for the energy unit of French rival Alstom, which has already received an official takeover bid from GE.

The protectionist French government has been wary of the GE bid and has encouraged Siemens to enter the fray. Kaeser said he had discussed a possible deal with German chancellor Angela Merkel, but made it clear that a decision to bid would “not be forced on us”.

Siemens’ second-quarter profit rose 16 per cent to €1.57bn, missing analysts’ estimates of €1.7bn.

Meanwhile struggling Alstom reported a 28 per cent drop in full-year profit yesterday to €556m, due to higher restructuring and financial charges, as well as a number of write-offs. It said that if it sells its energy assets, it will use the proceeds to strengthen its transport business, pay down debt and return cash to its shareholders.