Alstom board recommends GE bid

Alstom's board of directors unanimously recommended to accept the bid by GE to take over the French company's thermal power, renewables and grid sectors for an equity value of €12.35bn ($16.8bn), rejecting a rival bid from Siemens and Mitsubishi Heavy Industries (MHI).

"The combination of the very complementary energy businesses of Alstom and GE would create a stronger entity, best placed to serve customers globally and invest in people and technology over the long run," Alstom chief executive Patrick Kron said.

"Alstom would be associated to this ambitious combination through the energy alliances."

Kron now has to consult with the company's work councils, and then the transaction will be subject to merger control and other regulatory clearances.

The OK of the Alstom board came a day after the French government had approved a revised bid by GE and announced its intention to buy a 20% stake in the company.

The directors of Alstom said they were satisfied that the "productive exchanges" with the French state had resulted in a business proposal that not only addresses the interests of Alstom and its stakeholders, but also provides assurances in connection with concerns expressed by the French state.

The government in Paris had initially been openly hostile to GE's takeover bid, but loosened its opposition after the company sweetened the offer.

Under the bid now approved by the board, Alstom and GE would establish joint ventures in grids and renewable power.

In grids, each company would hold a 50% stake in a global business combining Alstom Grid and GE Digital Energy.

In Renewables, each company would hold a 50% stake in Alstom's offshore wind and hydro businesses.

The two companies would also create a 50/50 nuclear and steam alliance subject to some veto powers by the French state.

The board also reviewed the improved bid Siemens and MHI had made public Friday, but said it "does not adequately address the interest of Alstom and its stakeholders."