France agrees to buy 20% stake in Alstom

Tags: News
The final obstacle to GE's $17 billion takeover of Alstom's power division was overcome after the French government agreed to terms with the French engineering company's main shareholder.

Economy minister Arnaud Montebourg said yesterday on French television that the government will buy a 20% stake in Alstom from construction giant Bouygues SA.

The move fulfills his pledge to ensure that the French government would retain a say in jobs and decision-making at the company, which builds power plants and France's famed high-speed TGV trains. He did not comment on the final price of the stake to be bought from Bouygues.

Alstom's board approved GE's offer Saturday, a day after the government withdrew its long-held opposition and threw its support behind the American takeover, with a few conditions.

The deal is part of GE's new focus on building and servicing industrial equipment such as aircraft engines, power-plant turbines and oil and gas drilling equipment. The US company sold its remaining interest in NBC Universal last year as part of the shift.

Under the agreement with Alstom, GE agreed to sell its railroad signal business to the French company for about $825 million. The deal also calls for the 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.

GE has said that if shareholders and workers' representatives sign off on the deal, the acquisition of Alstom's energy unit should close sometime next year.

EDITORIAL OF THE DAY

  • Demonetisation is going to test PSU banks and their claims of efficiency

    FOR years, attempts have been made at consolidation in the public sector banks space, without much success.

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Sandeep Bamzai

<b>Disequilibrium:</b> The Looking glass war

In the looking glass war, where bitter adversaries - Ratan ...

Urs Schoettli

japan’s trump card

Like most, the Japanese, too, were surprised by the election ...

Rajgopal Nidamboor

Soul consciousness and reason

The soul, in the philosophical writings of ancient Greece, has ...