Rebirth of England

This time when Barron came to France, he also had another purpose, which was to prepare to acquire Alstom, the French energy and power giant.

Alstom was founded in 1928, and its business projects cover electric power, electromechanical, high-speed railway and other businesses.

Alstom has always been known as the pearl of French industry and a national treasure enterprise in France.

The famous TGV French high-speed train was built by Alstom; in Huaxia Bay, the sign of the Taipei MRT high-traffic system was also made by Alstom; in mainland China, Alstom operates projects including the Three Gorges Dam Hydroelectric generating units, Harmony CRH5 electric multiple units, Ling'ao Phase II nuclear power plant, Jinling Metro Line 1 and Line 2 trains, the fully automatic signaling system of the Yanjing Airport Line, and the train and signaling systems of the Shanghai Metro, etc. …

In the energy field, Alstom is the world's third largest manufacturer in the field of gas power turbines, second only to Siemens of Germany and General Electric (GE) of the United States...

In the field of power grid transmission and distribution systems, Alstom is the third largest manufacturer in the world after Germany's Siemens and Switzerland's ABB...

But for such a giant company, the current situation is not good. The reason is that Alstom has experienced a series of decision-making mistakes and bad luck before...

In 1999, Alstom and the power giant ABB formed a joint venture company AAP in order to compete with GE (General Electric), the leading power generation equipment supplier at the time, with Alstom and ABB each accounting for 50%.

After that, AAP Company developed the gas turbine generator sets GT24 and GT26, which were the world's most powerful (240,000 kilowatts) and the highest design efficiency (54%) at that time. Once the products came out, their technical performance attracted the attention of the world. In a short time 76 units were sold within the year.

In 2000, Alstom spent a huge sum of 5 billion euros to buy ABB's entire AAP shares from its partner ABB. Unfortunately, a generator set equipment produced by the previous joint venture AAP was found to be defective, and Alstom This resulted in additional repair costs of 2 billion euros.

It can be said that this decision-making error has greatly damaged Alstom's vitality...

But this is not over yet. As the world's largest manufacturer of luxury cruise ships, Alstom has designed a win-win financing plan in order to sell products to Caribbean cruise companies. However, the "9·11" incident has greatly affected Caribbean cruise companies. The business volume dropped sharply, so it stopped paying lease fees to the international banking group. The international banking group turned to the guarantor, Alstom, to press for debt, making Alstom even worse.

The house leaked and it rained all night. After the Channel Tunnel running the "Eurostar" high-speed train was completed, although Alstom, as the general contractor, further established its leadership in the industry, budget errors led to high construction costs. , causing further losses in its economic returns.

These incidents directly led to Alstom's financial crisis and its imminent bankruptcy...

As a French industrial giant, if Alstom declares bankruptcy, not only will 110,000 employees around the world lose their jobs, but it will also cause dozens of its creditor banks to go bankrupt one after another. Therefore, Alstom and the creditor banks simultaneously requested France The Ministry of Finance and Industry intervened.

Then in October 2004, the French government bought 21% of the shares to help Alstom tide over the difficulties.

In 2006, the French government sold its shares in Alstom to the French real estate giant Bouygues Group. The Bouygues Group has successively increased its shareholdings in the Alstom Group. Currently, their shareholding in the Alstom Group has reached 25%...

However, Alstom, which received the new capital injection, did not rise again. On the contrary, it deeply locked up the Bouygues Group. The economic crisis in 2008 brought a catastrophic blow to Alstom. The stock fell by 30% that year. Although it has since We tried to remedy the situation through large-scale layoffs and sales of assets to increase cash flow, but we still couldn't stop the downward trend...

Therefore, Bouygues Group, which has been trapped now, also has the idea of ​​selling their 25% stake in Alstom Group...

The reason why Barron is interested in Alstom is because its two main businesses, gas turbines and power generation turbines, as well as grid transmission and distribution systems, have great potential for Barron's power industry, as well as ships and high-speed railways. strategic significance.

In terms of the acquisition of Alstom, Barron also handed over the acquisition strategy to William Weber Capital, managed by Ashley.

"Currently we have contacted Bouygues Group and they are interested in selling their shares in Alstom..."

Ashley said to Barron:

“In addition, BNP Paribas and Natixis are all creditors of Alstom Group. We can obtain the support of these two banks in terms of the sale plan.”

When Alstom Group was on the verge of bankruptcy in 2004, its main creditor banks included BNP Paribas and Natixis. So far, these two banks still own a large amount of Alstom Group's debt.

You know, Standard Chartered-Merrill Lynch, controlled by Barron, is one of the major shareholders of BNP Paribas; and the controlling party of Natixis Bank is William Weber Capital.

Therefore, as the main creditor banks of Alstom Group, these two banks can naturally exert influence on Alstom Group and the French government in the acquisition.

After all, in addition to Barron's side, there are several companies interested in Alstom Group - including Siemens, General Electric and Mitsubishi.

"Mitsubishi does not pose a threat here. After all, in Alstom Group's main business, Mitsubishi is quite far away from it, and Mitsubishi does not have an advantage in terms of bidding..."

After listing the possible competitors, Ashley analyzed for Barron:

"As for Siemens, it competes with Alstom in all aspects. Both the French government and the Alstom Group are very resistant to the sale of Alstom to Siemens!"

The reason why Ashley said this is because the businesses of Siemens and Alstom are highly similar, which makes the French very worried that a merger between the two will trigger a large number of layoffs.

In addition, in 2004, when Alstom was in poor business and on the verge of bankruptcy, Siemens lobbied the French government not to rescue it, hoping to sell Alstom to Siemens...

It is also because of this history that everyone at Alstom expressed their unwelcome attitude toward Siemens.

"Furthermore, as the two largest electrical companies in Europe, and their businesses are fully competitive, it also means that if the two merge, they will directly form a monopoly on the industry, which is also not allowed by the EU's antitrust agencies."