Mitsubishi Heavy Industries and Siemens specify proposal to Alstom
Mitsubishi Heavy Industries (MHI) and Siemens today submitted an offer letter specifying further the proposed transaction to Alstom. With the specified offer MHI and Siemens reaffirm their commitment to strengthen Alstom as an independent Global Player in Energy and Transport. After extensive discussions with all stakeholders over the past days MHI and Siemens reviewed their proposal with regards to reducing complexity, strengthening execution and narrowing risk exposure. Based on this, MHI and Siemens decided to further simplify the structure of the proposal for the benefit of all parties involved. This resulted in an additional cash contribution of Euro 1.2 billion to Euro 8.2 billion, while the total valuation of Alstoms energy business increases by Euro 400 million to Euro 14.6 billion.
The specifications result in the following measures:
MHI now intends to buy a 40 percent stake in the combined steam, grid and hydro business of Alstom. This amendment will significantly simplify the implementation of the transaction, as this investment may now be undertaken through one single holding company, as opposed to three JVs as contemplated in its June 16th proposal. Therefore cash contribution from MHI increases by Euro 800 million, from Euro 3.1 billion up to Euro 3.9 billion, while the valuation of the underlying businesses remain unchanged.
Based on a subsequent, more advanced opportunity / risk analyses Siemens had been able to increase its cash offer by Euro 400 million. This will increase the total evaluation of the proposal accordingly to Euro 4.3 billion.
In addition to the proposed Letter of Intent for the Rail business, Siemens offers to enter immediately into a Joint Venture for Mobility Management including Signalling between Alstom and Siemens.
About MHI Group
Mitsubishi Heavy Industries (MHI) Group is one of the world’s leading industrial groups, spanning energy, smart infrastructure, industrial machinery, aerospace and defense. MHI Group combines cutting-edge technology with deep experience to deliver innovative, integrated solutions that help to realize a carbon neutral world, improve the quality of life and ensure a safer world. For more information, please visit www.mhi.com or follow our insights and stories on spectra.mhi.com.