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France secures option for major stake in Alstom

© AFP file picture

Text by FRANCE 24

Latest update : 2014-06-23

The French government on Sunday said it had secured an option to buy a 20 percent stake in Alstom from current holder Bouygues, clearing the final obstacle for a tie-up between the country’s industrial jewel and US conglomerate General Electric.

“We have a purchase option that enables us to buy when the price is as low as possible,” Economy Minister Arnaud Montebourg told France 2 television.

Bouygues will meanwhile lend the shares to the French state so that the government can exercise an immediate role as an Alstom shareholder, Montebourg said.

The move fulfills the minister's pledge to ensure that the French government would retain a say in jobs and decision-making at the company, which builds power plants and France’s famed high-speed TGV trains.

Alstom’s board approved GE’s offer Saturday, a day after the government withdrew its long-held opposition and threw its support behind the American takeover, with a few conditions.

The government and Bouygues sought to reach a deal before the expiry on Monday of GE’s formal bid valuing the Alstom energy business at 12.35 billion euros.

For the next 20 months, their eleventh-hour agreement hands the state an option to purchase 20 percent of Alstom from Bouygues at an unspecified discount, provided the market value is at least 35 euros per share.

If by then the state has not bought 20 percent, either from Bouygues or on the market, it has the right to purchase up to 15 percent at a similar discount whatever the market price.

(FRANCE 24 with AP, REUTERS)

Date created : 2014-06-22

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