France chooses GE for Alstom
The French government has approved GE’s revised $17bn bid for Alstom, and announced its intention to buy a 20% stake in Alstom, ushering in an end to the takeover saga which had eventually drawn in rivals Siemens and Mitsubishi Heavy Industries.
Alstom’s board has until Monday to sign off on the deal, but has been supportive of GE’s bid all along.
"It's a prerequisite that France takes 20% of the capital. If that's not fully realized, GE's bid will be blocked," Economy Minister Arnaud Montebourg told a news conference in Paris.
He said the French government was adamant that the US company adhere to its conditions that "guarantee energy independence, job creation on national territory and maintenance of decision-making centres in France."
The news comes after GE earlier today revised the terms of its offer, though it never upped its valuation of Alstom, with chief executive Jeff Immelt in Paris this week to negotiate with French officials on jobs and other hot-button issues.
GE has agreed to form a trio of joint ventures with Alstom – one for renewables, one for grids, and one for nuclear – rather than its original plan to simply buy Alstom’s power business.
The renewables joint venture will be based in France, and will include Alstom’s offshore wind and hydropower business.
The grids JV, also based in France, would include the grid operations of both Alstom and GE.
The revised $17bn offer came after the French government signaled its unhappiness with GE’s original offer, ultimately drawing Siemens of Germany and Mitsubishi Heavy Industries of Japan into the fray.