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Business

Alstom's board favour GE's €12.35 billion offer

Text by FRANCE 24

Latest update : 2014-06-18

The French engineering company Alstom said on Wednesday that it will decide by the end of May whether to accept a 12.35 billion euro offer from General Electric for its energy business.

The company said in a statement on its website that it had “received a binding offer” from GE, Alstom described the GE proposal as “practically perfect.”

It added its board had voted unanimously to accept the offer but had set up a committee of independent directors to review the proposed transaction,

France's government, which regularly intervenes in corporate decisions, had suggested that the sale to an American company was a threat to French energy independence and jobs. Officials had pressed for more time to allow rival Siemens, based in Germany, to pursue its interest.

Alstom said Wednesday that should it accept a Siemens offer it would have to pay the American company 1.5 percent of the purchase price.

The French Economy Minister Arnaud Montebourg made clear on Monday that he was unhappy that Alstom, "can decide to sell 75 percent of a national jewel behind the backs of the employees, of the government, of most of the board and of the senior executives".

He reproached Alstom head Patrick Kron in strong terms for not informing the government of takeover talks, accusing him of deliberately keeping him in the dark.

French President François Hollande has said that the French state would "inevitably have a say" and that the "sole criterion" in choosing the successful bidder would be which one "would be the best in creating more business and jobs".

Hollande weighed in

Hollande held meetings with both the chief executive of Siemens, Joe Kaeser, and the head of GE, Jeff Immelt, in Paris on Monday.

Energy accounts for about 70 percent of Alstom's business - with the GE deal potentially including the Thermal Power, Renewable Power and Grid Sectors - with the rest focused mainly on making railway equipment including the prized TGV high-speed train. Alstom said it would focus on transport operations after selling off the energy business.

On Tuesday, Siemens said it had decided to make an offer to Alstom. Reuters reported that Siemens proposed to exchange part of its train business plus cash for Alstom's power arm in a proposal worth $14.5 billion.

The German behemoth said its interest was conditional on it being granted access to the French company's books and permission to quiz management.

In unusually frank remarks about company strategy, the German government on Monday said a possible tie-up between the French and German groups offered a "big opportunity" for both countries.

It would present "great potential in terms of industrial policy for Germany and France", a spokesman for the economy ministry said in response to reporters' questions.

(FRANCE 24 with REUTERS, AP, AFP)
 

Date created : 2014-04-30

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