by Sophie Estienne
BERLIN, Sept 9 (AFP) - Following its tug-of-war with the French government over industrial group Alstom, German engineering giant Siemens saw its European ambitions foiled again on Thursday as Austria threw a spanner in the works of Siemens' plans to take over VA Technologie.
Siemens' Austrian arm said in a statement released in Vienna that it was no longer interested in taking over the Austrian energy, water and services group.
"A takeover by Siemens Austria is no longer an issue because there is no positive framework for a friendly (transaction)," the brief statement said.
Already on Wednesday, a spokesman for the German giant had said Siemens was interested in VA Tech "but only if all parties agree."
Nevertheless, there seemed to be a great deal of resistance to a deal, not least within the Austrian government, which holds a 15-percent stake in VA Tech via the state-owned industrial holding OeIAG>.
Austrian Finance Minister Karl-Heinz Grasser, for one, was opposed to what he saw as a "hostile" takeover. And in order to defend VA Tech from being taken over against its management's will, Vienna even authorisied OeIAG to participate in the upcoming capital increase at the company when that move would normally have led effectively to a partial privatisation.
With annual sales of some four billion euros (4.8 billion dollars), VA Tech is one of Austria's biggest technology groups.
It is also the country's principal industrial employer, with a workforce of 15,000. And any potential break-up would have had difficult social consequences.
Siemens was primarily interested in VA Tech's activities in energy distribution and infrastructures.
It planned to team up with another Austrian industrial group Mirko Kovats, which already holds a 12.5-percent stake in VA Tech and would have taken over the activities that Siemens did not want.
The failure to get its hands on parts of VA Tech is another blow to Siemens' ambitions to expand in Europe.
In the spring, the French government resented Siemens' attempts to get its hands on the choicest parts of the failing industrial giant Alstom. And in the end, Paris hammered out a state-financed rescue deal for Alstom with the EU Commission in Brussels that managed to by-pass the German company completely.
The Alstom tug-of-war soured relations between Paris and Berlin, with German Chancellor Gerhard Schroeder slamming the "extremely nationalist" positions of French economy minister Nicolas Sarkozy.
More recently still, Siemens' plans to acquire control of the Russian industrial group Power Machines Solovye Machiny also appear to have run into difficulty.
The Russian anti-monopoly authorities appear to be dragging their feet in rubber-stamping the deal and local press reports suggest that President Vladimir Putin is loathe to let a company that makes products for the Russian military fall into foreign hands.
Unlike the case with Alstom, the German government has so far kept quiet about VA Tech.
But the German press is up in arms.
"Politicians are intervening more and more frequently if they believe jobs or flagship companies are under threat," the business daily Handelsblatt complained.
"This is not the way the EU will achieve its goal of becoming the most competitive economy in the world."
And the daily Sueddeutsche Zeitung said: "As long as there are all these nationalistic reflexes, Europe doesn't have a chance of becoming a modern economy."