France sheds 3.1% GDF interest to support Alstom stake buy

Jun 25, 2014 - The French government has sold a 3.1% stake in energy group GDF Suez SA (EPA:GSZ) so it could secure enough funds for a planned purchase of an up to 20% stake in conglomerate Alstom SA (EPA:ALO).

France’s finance and economy ministries said in a statement yesterday the government has the right to sell up to 3.6% in GDF. The divested stake is worth EUR 1.5 billion (USD 2bn), Bloomberg said, adding that two sources informed it the shares were priced at EUR 20.18 apiece.

The move comes after the state agreed during the weekend to buy a stake of up to 20% in Alstom from telecoms and construction group Bouygues SA (EPA:EN) for at least EUR 35.00 per share. This transaction is conditional upon the completion of General Electric’s (NYSE:GE) planned acquisition of Alstom’s thermal, renewables and grid operations for an equity value of EUR 12.35 billion.

The French state will have 20 months following the closing of the GE-Alstom transaction to buy the minority stake in the local engineering giant.

GE’s proposal envisages the creation of 50/50 joint ventures in the areas of grid and renewable power. The green energy JV will comprise Alstom’s offshore wind and hydropower activities. Under the offer, GE and Alstom will also set up another equally-owned venture focused on nuclear energy and steam turbines.

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