Canadian Manufacturing

GE finalizes US$17B deal for Alstom’s energy unit after France relents, supports sale

Sale of Alstom's energy business comes after weeks of government opposition to American firm's bid



PARIS—The final obstacle to the US$17-billion takeover by General Electric Co. (GE) of Alstom’s power division was overcome over the weekend after the French government agreed to terms with the engineering company’s main shareholder.

Economy minister Arnaud Montebourg said on French television that the government will buy a 20 per cent 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 June 21, 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 American 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 US$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.

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