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Mitsubishi, Siemens mull bid for Alstom units

By WTOP Staff

ELAINE KURTENBACH
AP Business Writer

TOKYO (AP) — The possible bid by Mitsubishi Heavy Industries for turbine businesses of French engineering firm Alstom is part of Japan’s effort to carve out a share of the lucrative global energy infrastructure business.

Mitsubishi and German rival Siemens AG said Wednesday they are considering a joint bid for parts of Alstom and will decide by Monday whether to pitch it to Alstom’s board.

Mitsubishi Heavy is Japan’s largest heavy machinery maker with $32 billion in annual revenue. It produces ships, engines, nuclear power plants and arms for Japan’s defense ministry.

Reports indicate Siemens and Mitsubishi Heavy Industries have separate plans for the assets they’d acquire under the joint bid.

The financial newspaper Nikkei reported Thursday that Mitsubishi Heavy Industries and Hitachi, which merged their thermal power generation systems businesses in February, would set up a new joint unit to incorporate the Alstom acquisition. Mitsubishi would own 65 percent and Hitachi 35 percent, the same ratio both hold in their combined business, Mitsubishi Hitachi Power Systems, Ltd.

Mitsubishi CEO Shunishi Miyanaga said his firm can “substantially contribute to a partnership solution for Alstom which will create value for all parties involved, including the country of France.”

The report put the value of the potential acquisitions by Siemens and the Japanese companies at 1 trillion yen ($9.8 billion).

It said Mitsubishi would purchase Alstom’s steam turbine business while Siemens would buy its gas turbines assets. However, Mitsubishi issued a statement saying that details of the acquisition were still under discussion.

It said Mitsubishi would purchase Alstom’s steam turbine business while Siemens would buy its gas turbines assets.

Alstom has favored a $17 billion bid from U.S. company General Electric, but the French government has been resistant to the deal and sought rival offers.

Alstom’s board is to make a decision by June 23.

Mitsubishi Heavy Industries, founded in 1884, employs more than 80,500 people. It and Hitachi have led Japan’s effort to gain an edge in the energy systems industry dominated by GE and Siemens. They’ve found an enthusiastic ally in Prime Minister Shinzo Abe, who has circled the globe drumming up business for Japanese corporations.

Under Abe, many Japanese companies have profited massively from policies aimed at stimulating growth through heavy public spending and monetary easing that have helped weaken the yen, boosting the value of their overseas earnings in Japanese currency terms.

Cash holdings of Japanese corporations are equivalent to nearly 45 percent of their market capitalization, compared with less than 20 percent in the U.S. and about 25 percent in Germany.

But with the population in Japan aging and declining, companies have mostly opted to sit on their massive cash piles.

Domestic corporate investment has shown signs of recovery, but so far has lagged expectations, failing to provide the boost to real wages needed to ensure a sustained recovery from two decades of economic malaise.

Overseas foreign direct investment jumped 10 percent last year, to $135 billion, most of it flowing to Southeast Asia and the U.S., and most of it in non-manufacturing industries, according to Finance Ministry data.

There have been a few big overseas acquistions such as SoftBank Corp.’s purchase of a majority stake in Sprint, the third-largest U.S. wireless carrier, in July 2013 for $21.6 billion and Mitsubishi UFJ Financial Group’s purchase of Thailand’s Bank of Ayudhya Public Co. Ltd. for $5.7 billion.

Overall, though, overseas acquisitions by Japanese companies fell 58.8 percent in 2013 from the year before, to $47.7 billion, according to research firm Dealogic.

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Follow Elaine Kurtenbach on Twitter: http://www.twitter.com/ekurtenbach

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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