General Electric Co., seeking approval from France’s government for its $17 billion Alstom SA energy bid, is in early-stage talks with nuclear-plant maker Areva SA and other French companies about asset sales or partnerships, people familiar with the matter said.
GE is awaiting direction from the French government to see if it must sell assets to get the deal done, said the people, who asked not to be identified because details are private. GE is exploring concessions, including entering ventures in areas from nuclear power to wind-turbines to rail signaling, while it seeks clarification on what would appease the state, they said.
The overtures build on CEO Jeffrey Immelt’s pledge in an April 29 letter to French President Francois Hollande that GE would respect “the sovereign character” of France’s nuclear industry and consider local partners in energy and rail equipment. France last week bolstered its ability to block foreign takeovers, adding risk to GE’s pursuit of Alstom as Immelt works to return the company to its industrial roots and de-emphasize financial services.
“They will try to play ball a bit and be flexible to come up with solutions that the French government might look upon more favorably,” said Christian Mayes, an Edward Jones & Co. analyst based in Des Peres, Mo. “But at the end of the day, GE does have some leverage in that they can walk away.”
French companies have been contacting GE in anticipation of the government asking for asset sales or partnerships before approving the deal, though GE would prefer not to sell anything, a person said. The U.S. company is holding talks because it’s willing to be flexible, the person said.
Also threatening to complicate GE’s effort is Siemens AG’s consideration of a possible counterbid for Alstom’s thermal, renewables and grid operations, which make and service products from gas turbines to power transmission equipment. Munich-based Siemens may decide as early as this week on an improved offer, contingent on sufficient access to Alstom’s books and management, people familiar with the matter said last week.
The offer from Fairfield, Conn.-based GE excludes Alstom’s transport business, the maker of high-speed TGV trains.
Alstom is also the company supplying turbines for Deepwater Wind LLC’s 30-megawatt Block Island Wind Farm project.