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France backs new GE proposal for Alstom
- 10 years ago (2014-06-21)
- Junior Isles
The French government has conditionally backed a new proposal by GE for Alstom, despite a sweetened offer from Siemens and Mitsubishi Heavy Industries (MHI). The groups have been locked in a battle to buy the troubled French engineering giant.
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GE’s CEO Jeff Immelt proposed that GE and Alstom would establish two 50-50 joint ventures “to strengthen France’s and Alstom’s presence in energy and support its energy transition.” Under the proposal, the companies would also create a third 50-50 joint venture, based in France that would combine the two firms’ grid assets into a global business.
Additionally, GE’s proposal called for creating a France-based 50-50 joint venture in renewable energy, consisting of Alstom’s offshore wind and hydroelectric businesses.
GE said the offer would create a global nuclear and French steam alliance to assure security and growth of nuclear steam technology for France and formalise a memorandum of understanding to strengthen Alstom’s transportation business.
However, the French government said it would only back GE’s $17 billion offer for Alstom’s power and grid businesses if it is allowed to have a 20 per cent stake in the French engineering giant. This would make the government the firm’s biggest shareholder. “If that’s not realised, GE’s bid will be blocked,” said French Economy Minister Arnaud Montebourg.
The announcement came shortly after Siemens and MHI sweetened their joint takeover bid for Alstom. The decision could signal the end of the global takeover struggle over the French company.
Siemens and MHI added €1.2 billion ($1.63 billion) in new cash to their offer, raising it to €8.2 billion and boosting the valuation of Alstom’s energy business to €14.6 billion.
Montebourg said Siemens and Mitsubishi had made “a very serious offer”. He thanked the companies and said their competition with GE “ensured that the interests of France were preserved”.