GE purchase of Alstom's energy-related businesses is not a done deal

General Electric inched closer to buying the energy-related businesses of France’s Alstom by making a $16.9 billion bid, but rival offers and the concerns of French politicians may hold up or scuttle the deal.
By JONATHAN FAHEY, Associated Press Published: April 30, 2014
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General Electric inched closer to buying the energy-related businesses of France’s Alstom by making a $16.9 billion bid, but rival offers and the concerns of French politicians may hold up or scuttle the deal.

GE’s bid, announced Wednesday, has been endorsed by Alstom’s board, but the board will wait up to a month to formally accept or reject it.

GE would obtain the parts of Alstom that make and service electric power generation and transmission equipment.

Alstom would keep its transportation division, which makes high-speed trains.

GE values the acquisition at $13.5 billion because it will acquire $3.4 billion of Alstom’s cash if the deal closes.

But the deal is far from done. France’s government, which regularly intervenes in corporate decision making, has questioned whether selling Alstom to Fairfield, Connecticut-based GE threatens the country’s energy independence and jobs.

Alstom has formed a committee of independent board members to examine GE’s proposal.

Officials in France had pressed for a delay to allow GE’s German rival, Siemens, time to form its own bid.

Siemens said in a statement Tuesday that it would make an offer if Alstom allowed it access to company data and allowed it to perform due diligence.

Alstom’s board said it unanimously recognized the GE deal’s strategic and industrial merits, and Alstom called the deal “practically perfect.”

GE CEO Jeff Immelt said in a conference call with investors Wednesday that Alstom first contacted GE about a deal in mid-February.

He said the French company questioned whether it was large enough and geographically spread out enough to remain profitable over the long term in the global energy business.