France tells investors: just learn to play game our way

Wed Jun 25, 2014 11:52am EDT
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By Ingrid Melander

PARIS (Reuters) - For the boss of General Electric, the trials and tribulations of doing business in France are summed up in the lyric of an old Rolling Stones’ song: "You can’t always get what you want, but if you try sometimes you just might find you get what you need."

This pragmatic approach to one of the Western world's most complex business environments, spelt out in a blog by Jeff Immelt to staff after GE (GE.N: Quote) secured parts of Alstom's energy business, highlights France's uneasy investment image.

For some, government involvement in the Alstom saga - which included pushing through a decree expanding its powers to block takeover deals in strategic sectors, and the state taking 20 percent stake in Alstom (ALSO.PA: Quote) - has added to their concerns.

"The GE-Alstom deal is another negative example of the protectionist French attitude," the German country head of a large investment bank said.

"In France, bosses are sometimes taken hostage and tires are burned, but on top of that the state interferes even if companies don’t ask for it," said the banker, who declined to be named to avoid harming prospects of doing business in France.

He was referring to frequent worker protests over layoffs and so-called "boss-nappings" in which employees lock managers in their business premises overnight to demand concessions.

Other observers are more phlegmatic. GE's experience shows that for all its reputation, France isn't necessarily hostile to foreign takeovers if the acquirers know which buttons to push.

Ultimately, Paris agreed to the sale of Alstom's lucrative gas turbine assets and a joint venture in the sensitive nuclear arm, acknowledging the struggling firm could not go on alone.   Continued...

The logo of Alstom is seen on the entrance of Alstom plant in Aytre near La Rochelle, southwest France August 24, 2006. REUTERS/Regis Duvignau