Alstom future in the balance

THE FUTURE of French engineering group Alstom was due to be the only topic on the agenda when President Francois Hollande met delegations from General Electric (GE) and Siemens at the Élysée Palace today.

The two meetings followed a weekend of political and corporate drama, sparked by reports of a €10bn offer from GE to buy Alstom’s power turbines business.

News of the GE deal has caused political uproar in Paris, and has prompted a rival proposal from Siemens.

Mr Hollande last night met Prime Minister Manuel Valls, economy minister Arnaud Montebourg and energy minister Ségolène Royal to discuss the situation.

It has been reported that the government may be considering a takeover of up to 70% of Alstom, a company it bailed out in 2004, and which employs 13,000 people in France out of a global workforce of 93,000.

Economy minister Arnaud Montebourg yesterday said he would examine both GE and Siemen’s proposals “with the aim of preserving the interests of France’s industrial base” and added that the state was “ready to take part financially”.

But he told RTL that speculation that the government is about to nationalise Alstom is “premature”.

The government is “willing to consider” the competing offers of both GE and Siemens “with a view to safeguarding the interests of the industrial base in France. It will be "extremely vigilant" about maintaining the “excellence and independence of the French nuclear industry,” said a ministry of finance spokesman.

Mr Montebourg has already come out in favour of a possible tie-up between Alstom and Siemens. He said the German company’s proposal would create "two European and global champions in energy and transport”.

According to Le Figaro, Siemens is offering Alstom half of the German firm’s train-making division plus cash in exchange for the turbines arm of the French firm.

He also warned that the French government, on which Alstom relies for much of its business, would not accept a sale of its power business “in haste”.

“GE and Alstom have their agenda, which is that of shareholders, but the French government has its own, which is that of economic sovereignty," he said in a statement.

In a letter to GE’s chief executive Jeffrey Immelt and posted by BFMTV on Sunday, Mr Montebourg said any acquisition of French energy assets by an overseas investor required prior authorisation from French authorities, similar to those issued by the Committee on Foreign Investment in the United States.

He said: “To create a fait accompli by publicly announcing a transaction without having conducted preliminary discussions with the competent authorities would not be a wise way to proceed.”

But talks between GE and Alstom are reported to be “well advanced”. GE has refused to comment on the proposals.

Meanwhile, following a board meeting on Sunday night, Alstom has asked that trading in its shares are suspended pending the release of a statement on Wednesday.