General Electric Co. (GE:US), seeking France’s approval for its $17 billion bid to buy Alstom SA (ALO)’s energy division, pledged to keep the power-equipment maker’s nuclear operations in the country.
“We will answer the government’s legitimate demands that the nuclear unit remain French, that intellectual property stay French and that exports be protected,” Clara Gaymard, GE’s local chief, said May 24 in a radio interview. The U.S. company’s offer, which excludes Alstom’s transport business, “is good for France,” she said.
Gaymard’s comments, made a day after the Fairfield, Connecticut-based company agreed to a government request to extend the deadline for the planned Alstom purchase by three weeks, underlined GE Chief Executive Officer’s Jeffrey Immelt’s commitment to respect “the sovereign character” of France’s nuclear industry.
The U.S. manufacturer is in early stage talks with state-controlled nuclear group Areva SA (AREVA) and other French companies about asset sales or partnerships, people familiar with the matter said in mid-May.
French President Francois Hollande and Economy Minister Arnaud Montebourg have called on GE to improve its offer to buy Alstom, which is based in the Paris suburb of Levallois-Perret. Hollande has said the bid is “not acceptable” and has called for stronger jobs guarantees, while Montebourg has publicly stated a preference for a proposal from Siemens AG (SIE), Europe’s largest engineering company.
Montebourg signed a decree this month giving authorities the power to block some foreign takeovers, including in the energy industry. Munich-based Siemens may decide this month on a formal offer, people familiar with the situation said last week.
The German manufacturer has proposed swapping most of its trainmaking business for Alstom’s energy assets, forming two European leaders in the fields. Siemens would become one of the world’s largest producers of equipment for power plants and electric transmissions while a top-ranked global railway business would be based in France, bringing together the German company’s ICE high-speed trains and Alstom’s iconic TGV.
Alstom dropped 0.1 percent in Paris trading as of 9:08 a.m. while Siemens gained 0.7 percent in Frankfurt.
Alstom CEO Patrick Kron has called on the government to back GE’s bid, saying the offer meets concerns about France’s energy independence, local decision-making and prevention of job cuts as there are almost no overlaps between the operations.
Immelt said last week that he’s confident the U.S. company can complete the acquisition, which he expects to close next year. GE’s CEO will meet Hollande on May 28, the French president’s office said May 24.
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