French government supports GE bid for Alstom
Paris • U.S. conglomerate General Electric Co. looked set to win its months-long fight to acquire the power generation business of France's Alstom SA, after the French government dropped its objections and threw its support behind the American offer.
The final decision now rests with Alstom's board, which was due to meet later Friday. GE, which has sought a deal with Alstom since April, had given the French company until Monday to sign off on the $17 billion offer.
Friday's announcement brings an end to months of uncertainty over whether GE would be able to win over the French government's approval despite resistance by President Francois Hollande and other top officials.
French economy minister Arnaud Montebourg said Friday the government preferred GE's offer to a rival bid from Germany's Siemens and Japan's Mitsubishi Heavy Industries, and would take a 20 percent stake in Alstom.
Alstom has favored a tie-up with GE but had to postpone signing the deal since April, as the government intervened to seek assurances on jobs and decision-making.
GE boss Jeff Immelt was in Paris on Thursday and Friday to press the case for his offer with officials from Alstom, the government and unions.
Immelt saw off the rival offer from Siemens and Mitsubishi, but only after revisions to take account of the French government's concerns that the deal not lead to job losses, or move decision-making authority out of France.
Whereas GE's original offer entailed a clear-cut cash buyout of Alstom's power business, the new proposal calls for the two companies to set up three 50/50 joint ventures: one for the power grid businesses, another for the offshore wind and hydro-power operations, and a third for the nuclear steam turbines business.
Siemens and Mitsubishi Heavy Industries of Japan presented a rival bid Wednesday. An independent committee of Alstom's board is slated to review both offers and make a recommendation to the entire board before Monday.