The German government would rather see Siemens take over the power arm of its French rival Alstom than have it acquired by General Electric, a government source in Berlin told Reuters on Monday.
Separately, the German economy ministry said it believes a Siemens-Alstom tie-up would be a great opportunity for both Germany and France and Economy Minister Sigmar Gabriel is in contact with all parties, though it is a corporate decision.
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"A possible partial takeover offers great opportunities for both Germany and France from a potential industrial and political point of view," a ministry spokesman said.
The German engineering group is offering Alstom half of its train-making business plus cash in exchange for the French firm's power turbines division, Le Figaro newspaper reported on Sunday.
The French government wants to find alternatives to the GE offer, which sources said puts a value of $13 billion on the turbines and power grid equipment business and could be announced in days.
(Reporting Markus Wacket and Stephen Brown; Writing by Erik Kirschbaum)