The board of French rail and energy group Alstom has unanimously voted in favor of General Electric’s (GE) offer to take over the French company’s energy business for an equity value of 12.35 billion euros ($16.77 billion), rejecting a rival offer from Siemens-Mitsubishi Heavy Industries.
“The combination of the very complementary energy businesses of Alstom and GE would create a stronger entity, best placed to serve customers globally and invest in people and technology over the long run,” Alstom chief executive Patrick Kron said in statement.
The board of Alstom approved the transaction after French government agreed to support the deal, which will involve the state buying a 20% stake in Alstom, and other adequate steps to protect French interests.
“The French State has confirmed that, subject to execution of definitive agreements for the various alliances between GE, Alstom and the State, including the Global Nuclear & French Steam Alliance, and the State entering into an agreement to purchase shares in Alstom, it will grant the required foreign investment authorization”, the US conglomerate said in a statement.
GE chief executive office Jeff Immelt commented,“We will now move to the next phase of the Alstom alliance. We look forward to working with the Alstom team to make a globally competitive power and grid enterprise. We also look forward to working with the French government, employees and shareholders of Alstom. As we have said, this is good for France, GE and Alstom.”
“For GE, the overall economics of the deal remain intact,” Immelt said.
If approved, the deal, under which GE is expected to sell its railway signal business to Alstom, and set up three joint ventures with the French company, is expected to be accretive in one year.