The deal would put GE back into businesses it has abandoned, including equipment that generates electricity in hydroelectric plants and with steam in coal-fired and nuclear plants.
That business is not expected to grow at all in Europe, but it could help GE grow in developing markets.
“Alstom is uniquely well-positioned in the regions of the world that need power,” said Nicholas Heymann, an analyst at William Blair, including Africa, the Middle East, and Southeast Asia.
Heymann questioned whether Siemens has the cash to make a good offer to Alstom.
It already is in talks to buy the power generation assets of Rolls-Royce, and credit agencies have suggested Siemens is at risk of a downgrade if its cash balance dips much further.
Siemens could offer Alstom a swap, though, sending its railroad division to Alstom in exchange for Alstom’s energy business. That would likely be welcomed in France because it would bolster Alstom.
If GE prevails, though, finance chief Jeff Bornstein said GE would use $9.5 billion of its own cash and borrow $4 billion, to be paid back over five years, for the rest.
The deal is expected to immediately begin adding to GE’s earnings per share after it closes.
GE said it would continue to pay and grow its dividend, but cut back on share buybacks and likely refrain from other acquisitions through next year.
GE expects to cut $1.2 billion in annual costs after the deal closes.
That usually involves closing factories and cutting jobs, just the kind of thing French politicians are concerned about.