General Electric’s bid for French company Alstom’s energy assets is becoming mired by political interference as the French government said this week it would oppose GE’s €12.4 billion (£10.2 billion) offer despite Alstom’s board approving the bid.
In a letter to GE chairman and chief executive Jeffrey R Immelt, France’s economic minister Arnaud Montebourg expressed the government’s unease at a national company being broken up by a foreign investor and asked GE to reconfigure the deal, reported the New York Times.
Mr Montebourg wrote: “While it is natural that GE would be interested in Alstom’s energy business, the government would like to examine with you the means of achieving a balanced partnership, rejecting a pure and simple acquisition, which would lead to Alstom’s disappearing and being broken up.”
Alstom’s energy units, which make turbines for nuclear, coal and gas power plants, as well as the grid infrastructure to deliver electricity, contribute about three-quarters of the company’s €20 billion euros, or about US$30 billion, in annual sales.
GE’s plan would leave Alstom with only its transportation business, which makes TGV trains and other rail equipment and infrastructure.
Montebourg suggested that GE transfer its transport division to the French firm as part of the deal.
The minister has also expressed support for a deal with Siemens AG, which would involve an asset swap of some of its rail assets in exchange for Alstom’s energy division, but the company has yet to submit a bid.
Deal Watch: Malta buys more Itron smart water meters
Deal watch: GE’s bid for Alstom’s energy assets gets political
Smart gas meters: global market worth US$11.31bn by 2019