Germany's Siemens and Japan's Mitsubishi Heavy Industries (MHI) presented a joint offer to France's Alstom on Monday that included 7 billion euros ($9.5 billion) in cash, challenging a General Electric bid.
Under the deal, Siemens offered to buy Alstom's gas turbines business for 3.9 billion euros in cash, and MHI to buy stakes in Alstom power assets including hydroelectric power equipment and grid, to be held in separate joint ventures.
MHI would inject 3.1 billion euros in cash in Alstom and offer to take a stake of up to 10 percent in the French firm from shareholder Bouygues.
The race to acquire power activities from the French train and turbine maker has entered a crucial week, ahead of a June 23 deadline set by GE for its 12.4 billion euros bid for all of Alstom's energy arm, which includes its thermal power, renewable power and grid businesses.
The French government has criticized GE's proposal and gave itself powers to veto a deal on the grounds it does not want Alstom, an innovator and big employer, to sell the bulk of its business to a foreign firm without the state having a say.
The government has also tried to negotiate better offers and alliances to preserve Alstom as a player in both transport and energy, seeing both as vital national industries at a time when unemployment is stuck above 10 percent and a growing chunk of voters are turning towards the far-right.
Alstom, best known overseas for making TGV high-speed trains, employs 18,000 people in France, or around a fifth of its workforce. It was rescued from near bankruptcy by the state a decade ago and has since largely relied on public orders for power and rail equipment.
A formal rival offer gives France more leverage against GE as it seeks more job guarantees and a promise to keep major offices in France to secure the nation's energy independence. Alstom is a supplier of turbines for nuclear plants worldwide, and Paris fears that having these fall under US control could jeopardise exports in the atomic power industry.
However, it is far from certain whether the government, Alstom and its top shareholder Bouygues would genuinely support a Siemens-Mitsubishi offer over that of GE.
Siemens CEO Joe Kaeser and MHI's chief Shunichi Miyanaga will present the plan to France's lower house of parliament at 1500 GMT on Tuesday, according to the parliamentary press office, and are likely to face tough questions from lawmakers worried about national interests.
The government has already secured a pledge from General Electric to create 1,000 new jobs in France within three years of a deal, but finance minister Michel Sapin said on Sunday he expected the US conglomerate to further improve its offer. Siemens followed suit, saying on Monday it would offer a three-year job guarantee for workers at the gas business in France and Germany and said the alliance between Alstom and MHI would create more than 1,000 jobs in France.
GE is ramping up its charm offensive in the French press with new ads saying its proposed "alliance" with Alstom would create a global energy leader based in France while strengthening Alstom's transport business.
"Tomorrow is made in France," the ads read, below a drawing of an airplane - a hint at the jet engines GE makes via the US-French venture CFM - flying over a field of wind turbines. GE Chief Executive Jeff Immelt told French lawmakers last month his group would set up global headquarters for the grid, hydro, offshore wind and steam turbines businesses in France. GE is also considering a tie-up in rail signalling that would give Alstom control of that business, he said.
The government is worried that Alstom would be too weak once reduced to its smaller transport arm, and has played up an alternative tie-up with Siemens, which also makes trains, as an opportunity to create a European rail champion.
But Alstom has not shown interest in Siemens's rolling stock, and Siemens, while saying it would discuss the possibility of combining transport operations, made no promises that a deal would happen.
"Siemens intends to discuss diligently and in good faith solutions which create a strong European Champion with global reach and sustainable business strategies going forward in the fields of Mobility in the best interest of all parties involved," it said.