France nods to GE for Alstom deal

Nov 5, 2014 - France on Wednesday gave the go-ahead to US conglomerate General Electric Co (NYSE:GE) for its planned acquisition of the thermal, renewables and grid businesses owned by Alstom SA (EPA:ALO).

According to a press release, before approving the planned EUR 12.35 billion (USD 15.4bn) transaction, economy and industry minister Emmanuel Macron made sure that the proposal complies with the interests of the state and would ensure the survival of the domestic nuclear industry and energy supply.

In June, Alstom’s board recommended GE’s offer after determining that it addresses the interests of the company and its stockholders as well as the concerns expressed by the French government about local jobs. In addition to GE’s purchase of Alstom’s thermal, renewables and grid businesses, the proposal also envisages the creation of 50/50 joint ventures between the two companies, one of which will focus on offshore wind and hydropower.

In a separate statement on Wednesday, Alstom recognised the state’s decision and said it has signed a final deal with the US conglomerate following the completion of the information-consultation process with works councils. The French group has scheduled a meeting for December 19, 2014 at which stockholders will have the chance to cast their votes on the proposed transactions. The deals also need to be cleared by regulatory and competition bodies in a number of jurisdictions.

When approving the GE offer, Alstom rejected a joint proposal by German group Siemens AG (ETR:SIE) and Japan’s Mitsubishi Heavy Industries Ltd (TYO:7011) to acquire certain parts of its energy business.

Once the transaction is completed, Alstom will concentrate on developing its transport business and its future energy partnerships with the US group.

(EUR 1.0 = USD 1.249)

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