(Reuters) - General Electric Co (GE.N) has agreed to extend its $16.9 billion bid for the power arm of France's Alstom (ALSO.PA) until June 23 from June 2 at the request of the French government, the U.S. company said on Thursday.
GE said it agreed to the extension to facilitate discussions with the government. GE has encountered resistance from the French government, which has sought to encourage Germany's Siemens (SIEGn.DE) as a potential rival bidder.
"We view this extension positively," GE said in a statement.
French Industry Minister Arnaud Montebourg in a separate statement welcomed GE's decision to extend the deadline, saying it was in all parties' interests to find a solution before June 23.
Alstom also said it welcomed "GE's initiative to extend the period review of the offer by Alstom's board in order to allow the constructive dialogue with the French state to continue."
GE Chief Executive Jeff Immelt told an investor conference on Wednesday that the company was still going to "work constructively" with the French government on its bid and that he expects the deal to close.
"We wouldn't have started if we didn't think we could finish," Immelt said at the conference.
A source familiar with the talks said Immelt was aware that an extension was likely when he made his comments on Wednesday.
GE last month made its offer for Alstom's power turbine and grid arm in a deal designed to expand its installed base of power turbines, get a more complete offering to power customers and broaden GE's presence in emerging markets.
Montebourg said earlier on Thursday that the government was studying an all-French solution for Alstom that could involve public funds.
"Plan A is GE, plan B is Siemens, plan C is a home-based solution," Montebourg said.
Under pressure from the French government, Alstom has also opened its books to Siemens, which has dangled its rail business as part of a possible asset swap. Siemens has asked Alstom for more information ahead of any offer for the power business.
Reporting by Lewis Krauskopf in New York, additional reporting by Maya Nikolaeva and Michel Rose in Paris; Editing by Chris Reese and Cynthia Osterman