France Supports GE Bid For Assets Of Alstom

(RTTNews) - The $17 billion bid by General Electric Co (GE) to acquire most assets of Alstom SA (ALSMY, AOMFF, ALS.L) gained traction after French Economy Minister Arnaud Montebourg said Friday his government favors the deal. Prior to that, France plans to acquire a 20 percent stake in Alstom from Bouygues SA.

The announcements comes after intense counter bidding between GE and Siemens/Mitsubishi Heavy Industries for the French speed-train maker that created a political debate in France.

As per a revised bid, GE will acquire Alstom's coal and gas-fired steam turbine businesses, and establish three 50-50 joint ventures for Alstom's grid, renewable energy and nuclear turbine businesses. GE has also committed to create 1,000 new jobs in France over the next three years.

Also in a separate deal, Alstom will buy GE's train signaling unit for about 1 billion euros.

The French government has insisted that the joint venture HQs remain in France with the European HQ of the turbine business taken over by GE.

But the deal still needs the approval from Alstom board, which is expected to meet later Friday to discuss the proposal.

Alsom has been keen to clinch a deal with GE, but the offer took a political color as France was concerned that any deal should not impact jobs and that decision making at Alstom should not move beyond the country.

Earlier today, German engineering giant Siemens AG (SIEGY, SMAWF) and Japan's Mitsubishi Heavy Industries (MHVYF.PK) submitted a modified proposal to acquire Alstom's energy business. The bid includes an additional cash contribution of 1.2 billion euros to take the total offer figure to 8.2 billion euros. The total valuation of Alstom's energy business increases by 400 million euros to 14.6 billion euros.

GE stock is trading at $26.90, down $0.03 or 0.13%, on a volume of 21 million shares on the NYSE.

In Germany's Xetra exchange, Siemens stock closed at 100.25 euros, up 0.31 euros or 0.31%, on a volume of 5.9 million shares.