Alstom board approves GE bid: source

30th April 2014, Comments 0 comments

The Alstom board voted Tuesday to approve a bid for its energy arm by US group General Electric over a rival offer from German engineering giant Siemens, an informed source told AFP.

"Alstom has approved GE's offer," said the source after the board met following an announcement by Siemens that it had decided to make an offer for the engineering company.

Neither company would comment, but French daily Le Figaro said the Alstom board had voted unanimously in favour of GE's "firm and financed" offer to buy its energy unit for more than 10 billion euros ($14 billion).

The fate of the French group was suddenly put into play last week when it emerged that it was in advanced talks with GE.

News that the company, which has been termed a French "national jewel", could fall into American hands provoked an angry response from French Economy Minister Arnaud Montebourg.

He reproached Alstom head Patrick Kron in strong terms for not informing the government of takeover talks, accusing him of deliberately keeping him in the dark.

French Prime Minister Manuel Valls said Alstom was "of national strategic importance" and stressed the government would keep a watchful eye over offers.

Earlier Tuesday, Siemens said it had decided to make an offer to Alstom but gave no details of its intended bid.

But the German behemoth said it was conditional on it being granted access to the French company's books and the green light to quiz management.

According to a preliminary proposal sent at the weekend to Alstom, seen by AFP but not confirmed by the German company, Siemens offered to buy Alstom's energy business and give the French giant part of its train activities in return.

Economists say Alstom is too small alongside giants such as GE and Siemens and that it is uncompetitive.

- A 'big opportunity' -

The latest announcements come a day after Siemens chief Joe Kaeser met French President Francois Hollande in Paris for what the chief executive called "a very open, trustful and amicable exchange".

In unusually frank remarks about company strategy, the German government on Monday said a possible tie-up between the French and German groups offered a "big opportunity" for both countries.

It would present "great potential in terms of industrial policy for Germany and France", a spokesman for the economy ministry said in response to reporters' questions.

In a letter to the French presidency Tuesday, a copy of which was seen by AFP, GE stressed its desire to create a "world leader in energy in France" and create jobs in the country.

France's Financial Markets Authority (AMF) called on Alstom to make known the details of the offers before the bourse opens on Wednesday.

Hollande, who also met the head of GE Monday, has vowed to safeguard jobs at Alstom, which is one of France's biggest private sector employers with about 18,000 staff across the country.

- A national jewel -

The battle for the French company is politically sensitive as Hollande's Socialist government battles record high unemployment and declining industrial competitiveness.

During his hour-long meeting with GE's chief executive Jeffrey Immelt, the French leader pressed his case for jobs and for Alstom's French decision-making centre to be protected.

Hollande has said that the French state would "inevitably have a say" in the case and that the "sole criterion" in choosing the successful bidder would be which one "would be the best in creating more business and jobs".

Montebourg bristled Monday at the possibility that in the space of three days, Alstom "can decide to sell 75 percent of a national jewel behind the backs of the employees, of the government, of most of the board and of the senior executives".

Energy accounts for about 70 percent of Alstom's business, with the rest focused mainly on making railway equipment including the TGV high-speed train.

© 2014 AFP

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