Released May 22, 2014 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - France has introduced a decree that could stop a planned multi-billion euro takeover of French engineering giant Alstom S.A.'s (Paris, France).
In the light of a 12.35 billion ($16.9 billion) bid from General Electric Company (NYSE:GE) (Fairfield, Connecticut) for Alstom's power business and the likelihood of a counter offer in the coming days from German rival Siemens AG (NYSE:SI) (Munich, Germany), the French government has broadened an existing 2005 law that will let it block foreign takeovers of French companies operating in what it termed 'strategic industries'.
French President Francois Hollande and Economy Minister Arnaud Montebourg have openly opposed the GE deal and are unhappy with the offer. Pressure from the government forced Alstom to consider a possible rival offer from Siemens. The decree is seen as a tool for the government to jack up the price GE or Siemens will have to pay.
"There are talks with Siemens that are very constructive, which is not the case with GE," said Economy Minister, Arnaud Montebourg. "We want alliances that give our companies a global scale. We don't want dismantling."
Montebourg said this week that Siemens has written to Alstom asking for more information ahead of what he called 'a likely offer' for the French company's power business. "Siemens is pursuing its work and has written to Alstom this morning asking for more information and a deeper understanding of Alstom, obviously with the aim to most certainly draw up a proposal," he told Parliament.
Alstom's power and transmission business accounts for 70% of its revenues. The company intends to concentrate more on the transport and railway sectors. It is understood that the Siemens offer will comprise of cash and some of its own railway business for Alstom's power business.
Speaking about the offer made at the end of last month, Jeff Immelt, GE Chairman and CEO, said: "This is a strategic transaction that furthers GE's portfolio strategy. Power & Water is one of our higher growth and margin industrial segments and is core to the future of GE. Alstom, like GE, is a company built on engineering, innovation and technology. Alstom not only advances our strategic priorities and industrial growth, but is also expected to provide an excellent return on capital. Alstom's businesses are very complementary in technology, operations, and geography to our power and grid businesses."
For additional information, see May 9, 2014, article - GE-Alstom Combination Piques Global Power Generation Interest.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
In the light of a 12.35 billion ($16.9 billion) bid from General Electric Company (NYSE:GE) (Fairfield, Connecticut) for Alstom's power business and the likelihood of a counter offer in the coming days from German rival Siemens AG (NYSE:SI) (Munich, Germany), the French government has broadened an existing 2005 law that will let it block foreign takeovers of French companies operating in what it termed 'strategic industries'.
French President Francois Hollande and Economy Minister Arnaud Montebourg have openly opposed the GE deal and are unhappy with the offer. Pressure from the government forced Alstom to consider a possible rival offer from Siemens. The decree is seen as a tool for the government to jack up the price GE or Siemens will have to pay.
"There are talks with Siemens that are very constructive, which is not the case with GE," said Economy Minister, Arnaud Montebourg. "We want alliances that give our companies a global scale. We don't want dismantling."
Montebourg said this week that Siemens has written to Alstom asking for more information ahead of what he called 'a likely offer' for the French company's power business. "Siemens is pursuing its work and has written to Alstom this morning asking for more information and a deeper understanding of Alstom, obviously with the aim to most certainly draw up a proposal," he told Parliament.
Alstom's power and transmission business accounts for 70% of its revenues. The company intends to concentrate more on the transport and railway sectors. It is understood that the Siemens offer will comprise of cash and some of its own railway business for Alstom's power business.
Speaking about the offer made at the end of last month, Jeff Immelt, GE Chairman and CEO, said: "This is a strategic transaction that furthers GE's portfolio strategy. Power & Water is one of our higher growth and margin industrial segments and is core to the future of GE. Alstom, like GE, is a company built on engineering, innovation and technology. Alstom not only advances our strategic priorities and industrial growth, but is also expected to provide an excellent return on capital. Alstom's businesses are very complementary in technology, operations, and geography to our power and grid businesses."
For additional information, see May 9, 2014, article - GE-Alstom Combination Piques Global Power Generation Interest.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
