Released June 24, 2014 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The French government won an option to buy up to 20% of Alstom S.A. (Levallois-Perret, France) from industrial group Bouygues S.A. (Paris, France). With this agreement, General Electric (NYSE:GE) (Fairfield, Connecticut) has jumped the last hurdle that would prevent its $17 billion purchase of Alstom's energy assets.
The government had supported the acquisition under the condition that it first secured a stake in Alstom. The French government's options to buy Alstom shares from Bouygues will last for 20 months and begin after the GE-Alstom deal is completed. As part of the deal, the government can buy shares held by the French conglomerate at a discount from their market rate. The minimum price of the shares would be 35 euros (US$47.60).
Alstom's board had unanimously approved GE's offer to buy the company's energy assets on Saturday. Siemens AG (NYSE:SI) (Munich, Germany) and Mitsubishi Heavy Industries (Tokyo, Japan) had presented competing offers to acquire Alstom's assets.
As part of the deal, GE will sell its railroad signal business to Alstom for about $825 million. GE's offer also calls for the two companies to set up three 50-50 joint ventures: one for the combined power grid assets of GE and Alstom; another for renewables, such as offshore wind and hydropower operations; and a third for nuclear steam turbine production and servicing.
Alstom will invest 2.6 billion euros ($3.5 billion) in cash for the joint ventures, which will generate synergies of 880 million euros ($1.2 billion) annually by their fifth year, according to a company statement. GE also signed a memorandum of understanding (MoU) to sell its signalling business to Alstom for about 607 million euros ($825 million).
GE has said that the deal is now dependent on shareholders and workers' representatives signing off on it. The acquisition of Alstom's energy unit is expected to close sometime next year.
Last Friday, the French government dropped objections and supported the General Electric's offer over a rival offer by Siemens AG (NYSE:SI) (Munich, Germany) and Mitsubishi Heavy Industry or MHI (OTC:MHVYF) (Tokyo, Japan). For additional information, see June 17, 2014, article - Mitsubishi Joins Siemens in Alstom Takeover Bid Mitsubishi Joins Siemens in Alstom Takeover Bid
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 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.
The government had supported the acquisition under the condition that it first secured a stake in Alstom. The French government's options to buy Alstom shares from Bouygues will last for 20 months and begin after the GE-Alstom deal is completed. As part of the deal, the government can buy shares held by the French conglomerate at a discount from their market rate. The minimum price of the shares would be 35 euros (US$47.60).
Alstom's board had unanimously approved GE's offer to buy the company's energy assets on Saturday. Siemens AG (NYSE:SI) (Munich, Germany) and Mitsubishi Heavy Industries (Tokyo, Japan) had presented competing offers to acquire Alstom's assets.
As part of the deal, GE will sell its railroad signal business to Alstom for about $825 million. GE's offer also calls for the two companies to set up three 50-50 joint ventures: one for the combined power grid assets of GE and Alstom; another for renewables, such as offshore wind and hydropower operations; and a third for nuclear steam turbine production and servicing.
Alstom will invest 2.6 billion euros ($3.5 billion) in cash for the joint ventures, which will generate synergies of 880 million euros ($1.2 billion) annually by their fifth year, according to a company statement. GE also signed a memorandum of understanding (MoU) to sell its signalling business to Alstom for about 607 million euros ($825 million).
GE has said that the deal is now dependent on shareholders and workers' representatives signing off on it. The acquisition of Alstom's energy unit is expected to close sometime next year.
Last Friday, the French government dropped objections and supported the General Electric's offer over a rival offer by Siemens AG (NYSE:SI) (Munich, Germany) and Mitsubishi Heavy Industry or MHI (OTC:MHVYF) (Tokyo, Japan). For additional information, see June 17, 2014, article - Mitsubishi Joins Siemens in Alstom Takeover Bid Mitsubishi Joins Siemens in Alstom Takeover Bid
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 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.
