France, EU edge toward deal on Alstom

25th May 2004, Comments 0 comments

PARIS, May 25 (AFP) - France and the European Union signalled progress here Tuesday toward a deal to save French engineering giant Alstom, sparking a surge in shares of the troubled group.

PARIS, May 25 (AFP) - France and the European Union signalled progress here Tuesday toward a deal to save French engineering giant Alstom, sparking a surge in shares of the troubled group.

Alstom shares jumped 6.76 percent to reach EUR 1.25 in mid-afternoon trading on a Paris market that was down 0.43 percent at 3,613.42.

The movement followed an announcement by officials in Brussels that France, in a bid to win EU backing for a rescue plan, had promised to conclude "one or more" industrial partnerships for a major part of Alstom's business.

The European Union's executive arm said the promise had been made by French Finance Minister Nicolas Sarkozy in a telephone call to EU Competition Commissioner Mario Monti.

Monti and Sarkozy a week ago reported that the basis of an accord had been reached that would authorize French state involvement in a rescue for Alstom that was drafted last autumn.

"The (French) state commits itself to the Alstom group concluding one or more industrial partnerships within four years. These partnerships will involve a major part of Alstom's activities," the EU executive commission said in a statement.

It added that no tie-ups would be allowed between Alstom and any companies controlled by the French state, unless the commission had given agreeement to such alliances.

But in Paris a spokesman for the Finance and Economy Ministry said later that an expected final agreement between Paris and the EU - which could now come "within hours" - would favor alliances with private companies while not excluding "the possibility of public partnerships."

"The commission wanted Alstom to find one or two partnerships in the years ahead, to which we were completely open as was Alstom, for which that (partnerships) has been an established policy," the spokesman said.

He added that it was "no secret" that German rival Siemens has been interested in some of Alstom's operations but said other enterprises as well were eyeing arrangements with the French group.

"There must without doubt be partnerships," the spokesman continued, "but there must not be partnerships that result in a dismantling or a weakening of Alstom, which is why it is important to have a delay, allowing Alstom to negotiate from an improved position rather than from a weakened situation."

© AFP

Subject: French news

 

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