Alstom urges France to back GE bid as energy orders suffer

Alstom SA CEO Patrick Kron called on the French government to back a $17 billion offer by U.S. rival General Electric Co. for its energy units, saying uncertainty about his company’s future is making it difficult to win orders. More

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Alstom urges France to back GE bid as energy orders suffer

Posted 5/21/14

PARIS – Alstom SA CEO Patrick Kron called on the French government to back a $17 billion offer by U.S. rival General Electric Co. for its energy units, saying uncertainty about his company’s future is making it difficult to win orders.

“GE’s offer is an excellent option,” Kron told France’s National Assembly on Tuesday. The bid meets government concerns about France’s energy independence, local decision making and potential job cuts as there are almost no overlaps between the companies’ operations, he said.

Kron’s renewed support for GE’s bid contrasts with comments by French Economy Minister Arnaud Montebourg, who on Tuesday reiterated a preference for Siemens AG’s proposal to swap most of its rail business for Alstom’s energy assets in a deal that would form two leading European energy and rail companies. While Kron said he would examine any rival offer, he told the lawmakers that he wants a swift solution.

“Today, it’s not easy to get orders,” the executive said. “This current period full of uncertainties mustn’t last for a long time.”

Munich-based Siemens may decide as early as this week on an offer, contingent on sufficient access to Alstom’s books and management, people familiar with the matter said last week.

Alstom, which is also the company supplying turbines for Deepwater Wind LLC’s 30-megawatt Block Island Wind Farm project, dropped 1 percent in Paris trading as of 10:30 a.m. while the French benchmark CAC 40 Index declined 0.2 percent. The stock had jumped as much as 18 percent on April 24 after Bloomberg News reported on the talks with GE.

State intervention

France last week passed legislation extending the government’s ability to block foreign takeovers into the fields of energy, transport and health care.

The decree was a “decision to put an end to a form of laissez faire,” Montebourg told the National Assembly. “Our companies aren’t prey, but they need alliances. They’re not available for dismantling - particularly when they have our strategic interests in their hands.”

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