Paris rejects General Electric’s Alstom bid

AFP, PARIS

Wed, May 07, 2014 - Page 15

The French government on Monday rejected a bid by US industrial giant General Electric Co (GE) for Alstom SA’s energy business, calling for a “balanced partnership” that could include a rail deal.

“In its current form, we can unfortunately not agree to the propositions you have made, resting only on the acquisition of Alstom’s activities in the energy sector,” French Economy Minister Arnaud Montebourg said in a letter to GE chief executive officers Jeff Immelt.

The US behemoth has been vying for Alstom’s energy assets with German giant Siemens AG in a politically sensitive bidding war over the French engineering group.

Montebourg was charged by French President Francois Hollande with responding to GE’s 12.4 billion euro (US$17 billion) bid for the energy assets of the company, which employs 18,000 staff in the country.

In the letter, Montebourg told Immelt that the French government “wishes to examine the ways and means of a balanced partnership, rejecting a pure and simple acquisition that would lead to the demise of Alstom.”

He said the French government was concerned about “the separation and isolation of the branch of Alstom specialized in rail transport” if GE only buys the energy arm.

Energy activities — which include power generation and transmission — account for about 70 percent of Alstom’s business, but the company is better known as a railway-equipment maker that manufactures France’s prized TGV high-speed trains.

Montebourg suggested that GE in turn hand over its activities in the rail sector to Alstom.

“It would be highly desirable to insure a global future for Alstom Transport, by ceding General Electric’s transport activities to this entity, including freight trains and signals, representing revenues of US$3.9 billion,” the minister said.

Reacting to Montebourg’s letter, GE defended its bid.

“We appreciate the engagement of the French government. We believe our proposal is good for France, for Alstom and for GE. As our letter to President Hollande stressed, we are open to continuing dialogue,” the company said.