Mitsubishi Heavy Industries (MHI) and Siemens have jointly provided a proposal for the French multinational conglomerate, Alstom.

Aimed to preserve current perimeter in almost all Alstom’s activities, MHI and Siemens proposed several transactions to enhance industrial sustainability and to boost its position as a diversified global player in energy and transport.

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MHI offered to form a broad industrial alliance with Alstom and create three joint ventures by acquiring Alstom’s 40% of steam and its nuclear business, 20% of its grid business and 20% of its hydro business, for €3.1bn ($4.19bn) in cash.

Siemens President and CEO Joe Kaeser said Alstom will remain an independent energy and transport player with a strong brand.

"This transaction would further enhance our value chain of electrification by expanding our installed base in gas. This fits well into Siemens – Vision 2020 to strengthen our core activities," Kaeser said.

"I believe our collaboration with Alstom in the turbine business will give birth to another Japan-France alliance."

Additionally, MHI plans to become a stable and long-term shareholder of Alstom by offering to acquire up to 10% interest from Bouygues SA.

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Meanwhile, Siemens offered to buy 100% of Alstom’s gas business including related service contracts for €3.9bn ($5.3bn) in cash, and offer a job guarantee for three years in France and Germany upon completion of transaction.

Mitsubishi Heavy Industries president and CEO Shunichi Miyanaga said "I believe our collaboration with Alstom in the turbine business will give birth to another Japan-France alliance with superior technological expertise, which will be able to address the needs of emerging nations."

The proposal from MHI and Siemens is expected to considerably strengthen Alstom’s brand as a sustainable player in energy and transport, while the transaction will provide additional financial flexibility while strengthening its balance sheet.

The transaction proceeds could secure Alstom’s future growth and allow investments in innovative technologies.

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