Alstom shareholders approve sale energy assets to GE
Shareholders approved Friday the 12.4-billion-euro ($15.2-billion) sale of Alstom's energy assets to US group General Electric by which the French company will refocus on high speed trains.
"It is the best solution for the future of Alstom," chief executive Patrick Kron said at the meeting marked by sharp exchanges, saying the company had lost sufficient scale to compete in the energy sector.
Nevertheless, the sale that sees Alstom sell off about 70 percent of the company, was approved by 99.187 percent of the votes.
GE won a two-month deeply political battle to buy the energy arm of Alstom in late June, in the face of initial French government opposition and a rival joint offer from Germany's Siemens and Mitsubishi Heavy Industries of Japan.
GE snapped up the prize of Alstom's gas turbine unit -- a large, lucrative business with long-term contracts and income stream that complements GE which is already the world leader in the sector.
But it had to agree to a number of other deals in order to win over the French government, which has a veto over sales in strategic sectors of the economy, and which was worried about job losses amid a recession and high unemployment.
GE also agreed to take on Alstom's nuclear, steam turbine, offshore wind and hydro power businesses, which it will run as 50-50 joint ventures with French shareholders including, most importantly, the government.
And it will fold its electricity grid business into Alstom's, also to be run as a 50-50 joint venture.
Meanwhile GE will hand its own train signalling business to the firm's high-speed rail operation -- which makes France's famed TGV trains -- and which will become the core business of Alstom.
GE also had to pledge to create jobs in France when it might have originally thought to make gains through consolidation, including paying a penalty of 50,000 euros for every job out of the 1,000 promised that it fails to create in France.
Alstom employs 18,000 people in France out of a total 90,000 worldwide.
The French government formally approved the sale in November.
It needs the approval of regulators in nearly two dozen countries.
© 2014 AFP