France Supports GE Bid for Alstom
France has selected General Electric for as a partner for Alstom SA with a condition of 20 percent stake in the venture. Economy Minister Arnaud Montebourg announced that the state would support GE bid for the Paris-based Alstom’s gas turbine operations.
France has rejected the offers from Siemens and Mitsubishi Heavy Industries. Economy Minister Montebourg termed the 20 percent stake condition as strategic interest of the state in the energy major.
GE Chief Executive Jeff Immelt will have to respond to the offer presented by France. The country looks forward to job creation, energy independence and an important role in decision making in the boardroom of energy giant.
For the past many days, serious discussions continued between the top ministers in France including President Francois Hollande and the CEOs of three major companies. Montebourg announced that the deal in favor of General Electric is in the best interest of France. He added that the offers from Mitsubishi Heavy Industries and Siemens were serious and there were lot of things to evaluate.
General Electric and Alstom have not issued any fresh statement on the development. France is also keen to float joint ventures in renewal and nuclear energy sector. The current development will bring a major positive for General Electric, which currently employs nearly 10,000 workers in France. The company is familiar with the work and business culture in France.
On Thursday, General Electric announced major shift in its strategy for Alstom in order to get approval from politicians and unions in France. The offer of Siemens valued Alstom at $19.8 billion compared to GE’s bid valuing the company at $17 billion. GE is offering more cash compared to Siemens or Mitsubishi Heavy Industries.
The French government will purchase 20 percent stake from Bouygues. The Paris-based Bouygues S.A. has not yet agreed to any price for its 29 percent stake in Alstom.
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