PARIS – U.S. conglomerate General Electric Co. looked set Friday to win its months-long fight to acquire the power generation business of France’s Alstom SA after the French government dropped its objections and threw its support behind the American offer.
The final decision rests with Alstom’s board, which was meeting Friday night to discuss the offer. GE, which has sought a deal with Alstom since April, had given the French company until Monday to sign off on the $17 billion offer.
Friday’s announcement brings an end to months of uncertainty over whether GE would win the French government’s approval despite resistance from President Francois Hollande and other top officials.
French economy minister Arnaud Montebourg said the government preferred GE’s offer to a rival joint bid from Germany’s Siemens and Japan’s Mitsubishi Heavy Industries, and would take a 20 per cent stake in Alstom.
Alstom has favoured a tie-up with GE but had to postpone signing any deal while the government intervened to seek assurances on jobs and decision-making.
GE boss Jeff Immelt has been in Paris since Thursday to press his case with officials from Alstom, the government and unions.
Immelt saw off Siemens and Mitsubishi after making revisions to address the French government’s concerns that the deal would not produce job losses or move decision-making authority out of France.
Whereas GE’s original offer entailed a clear-cut cash buyout of Alstom’s power business, the new proposal calls for the two companies to set up three 50-50 joint ventures: one for the power grid businesses, another for offshore wind and hydro-power operations, and a third for nuclear steam turbines.
France remains in talks to buy 20 per cent of Alstom from French conglomerate Bouygues, which is Alstom’s largest shareholder with a 29 per cent stake. An agreement on price is expected to be reached by Monday. At current market value, a stake of that size would be worth about 1.7 billion euros ($2.3 billion).
Siemens and Mitsubishi presented their bid Wednesday. An independent committee of Alstom’s board is slated to review both offers and make a recommendation to the entire board before Monday.
Associated Press reporter Sylvie Corbet in Paris contributed to this report.