Alstom backs GE bid as Bouygues stake deal takes shape

Sat Jun 21, 2014 4:36pm EDT
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By Gilles Guillaume and Elizabeth Pineau

PARIS (Reuters) - The board of Alstom backed a proposed tie-up with General Electric on Saturday as the French government neared agreement with shareholder Bouygues over the last major outstanding plank of the deal.

An accord is taking shape on the price at which the government will acquire 20 percent of Alstom from construction group Bouygues, two sources familiar with the discussions said, adding that it would likely be finalised on Sunday.

Bouygues, GE and Alstom all declined to comment on the ongoing stake sale talks as the French industrial group's board formally endorsed the plan with unanimous support.

The GE deal "not only addresses the interests of Alstom and of its stakeholders but also provides assurances in connection with concerns expressed by the French state", Alstom said.

President Francois Hollande earlier raised the pressure on Paris-based Bouygues, warning that failure to agree a price for the stake purchase could still scupper the tie-up.

"If this sale did not go ahead at a price acceptable to the government, it would be necessary to reconsider the alliance as it has just been announced," Hollande told reporters in Paris.

On Friday the government backed the proposed deal with GE, which vales Alstom's energy business at 12.35 billion euros ($16.77 billion), rejecting a rival Siemens-Mitsubishi offer it had previously encouraged as ministers sought guarantees on domestic jobs and activities deemed strategic.

The announcement drew a line under a two-month battle for Alstom that had become heavily politicized as soon as the first reports of an agreed tie-up with GE appeared in April.   Continued...

View of a Haliade 150 offshore wind turbine at Alstom's offshore wind site in Le Carnet, on the Loire Estuary, near Saint Nazaire, western France, April 27, 2014. REUTERS/Stephane Mahe