Don't miss

Replay


LATEST SHOWS

ENCORE!

Aishwarya Rai: The Queen of Bollywood

Read more

MEDIAWATCH

Ireland on the eve of gay marriage vote

Read more

DEBATE

Will Ireland Say "I Do"? Gay Marriage Referendum Challenges Catholic Values (part 1)

Read more

EYE ON AFRICA

Tensions continue to rise in Bujumbura

Read more

EYE ON AFRICA

Protests continue in Burundi as calls mount for election delay

Read more

EYE ON AFRICA

Burundi: Nkurunziza delays parliamentary polls as clashes continue

Read more

PEOPLE & PROFIT

Crude forecast: What's next for oil prices?

Read more

ENCORE!

Gaspar Noé's 3D sex film is lukewarm

Read more

FOCUS

Mother of French terror victim seeks to open minds

Read more

Business

Potential GE takeover of Alstom a ‘patriotic concern’ for France

© Photo: AFP

Text by FRANCE 24

Latest update : 2014-04-25

A possible takeover bid by US giant General Electric for struggling French engineering group Alstom would be a matter of “patriotic concern” for France, the country’s Economy Minister Arnaud Montebourg said Friday.

It follows a report by Bloomberg on Thursday that GE is in talks over a $13 billion deal for the turbine and train maker, which employs a fifth of its workforce - or around 18,000 people - in France.

Speaking to French daily Le Monde, Montebourg admitted the possibility of losing one of France’s biggest engineering groups to a foreign company was a significant worry for the government.

“Alstom is a symbol of our industrial power and of French ingenuity,” he said.

“The government expresses patriotic concern and watchfulness with regard to Alstom,” he said. “This concern is focused on the serious risk of losing a major decision centre.”

Montebourg said that he and French Prime Minister Manuel Valls would meet with GE’s president to discuss the issue, adding that he had already spoken with the company’s chief executive on Thursday.

Alstom CEO denies takeover talks

The minister’s comments came as France’s stock market regulator forced a suspension in the trading of Alstom shares – which jumped 10.9% on Thursday – until the company releases a statement on its future.

Under pressure to respond to the rumours, Alstom’s chief executive Patrick Kron reportedly told trade unions the company was in talks with GE over “an industrial deal”, but not a takeover.

“I do not confirm the rumours of a takeover circulating in the US press,” Kron was quoted as saying. “The truth is we are discussing an industrial deal”.

The union sources said Kron was expected to chair a meeting of the executive board later on Friday to discuss the matter.

The French engineering giant has been struggling in recent months, having been hit hard by Europe’s economic weakness and a drop in orders for power equipment from utilities, which in turn are suffering from low electricity prices.

Before the takeover bid report, Alstom shares had slumped 20 percent in the past 12 months, while last year it announced 1,300 job cuts including a stake in its transport business, which makes France’s prized high-speed TGV trains.

A buyout by GE could help the French firm gain access to the cash it needs, while the US group would get infrastructure assets cheaply and make cost savings in power generation. For instance, GE is looking to expand in smart grid technology, where Alstom is a strong player.

GE also has the support of Bouygues, Alstom’s biggest shareholder with a 29 percent stake, according to the Bloomberg report.

(FRANCE 24 with REUTERS)

Date created : 2014-04-25

  • FRANCE

    Firms will not be fined for closing factories, French court rules

    Read more

  • FRANCE - INDUSTRY

    SFR buyout threatens to shake up French telecom market

    Read more

  • FRANCE

    US magnate in U-turn offer for 'lazy' French tyre plant

    Read more

COMMENT(S)