Study On ALSTOM Merger And Acquisition Case

Challenging macro-economic conditions continued to weigh on Alstom's commercial performance with still a sluggish economic environment in mature countries. In this environment, a large number of major infrastructure projects have been postponed, notably in energy area. During fiscal year 2013/14, Alstom's share price reduced more than 20%.As disclosed, Alstom received a binding offer from GE to acquire its Energy business. The scope of the proposed transaction includes Thermal Power, Renewable Power and Grid Sectors, as well as corporate and shared services. As the news came out, all the European energy cooperation shocked. Alstom also received an offer from Siemens and Mitsubishi Heavy Industries very soon. The Board of Alstom Directors, with the assistance of the ad hoc committee and its legal and financial advisors, reviewed the proposal. After that, the Board of Alstom Directors has unanimously determined that this proposal does not adequately address the interests of Alstom and of its stakeholders. At last, Alstom and GE would establish joint venture to complete the energy transaction.The main purpose of this paper is to analysis Alstom's energy business acquisition, and aimed on explain these two main issues: First, why does Alstom sell its energy business(including thermal power, renewable energy and grid); Second, Facing four different offers from GE, Siemens and Mitsubishi Heavy Industries, why does Alstom chose merge energy with GE, but not the other three choices.This paper used GE matrix, A.D.little(ADL) matrix, PEST, Porter's five forces model and other tools to study Alstom Acquisition Case. The author has been worked for Alstom nearly 7 years, and witnessed this acquisition by herself. The author did a field research in order to preparing this paper.