After weeks of negotiations, the French government said it has accepted a $16.9 billion offer from American conglomerate General Electric Co. (NYSE: GE) to take over the French manufacuring company Alstom’s energy business, but the government will take a 20 percent stake in Alstom.
Arnaud Montebourg, French economy and industry minister, said the terms of the final deal with GE were "hard but necessary" to protect the interests of the state, the Financial Times reported.
GE CEO Jeffrey Immelt met with Montebourg in Paris on Thursday, the third such meeting since late April when GE launched a $17 billion bid for the French engineering firm’s business. Germany’s Siemens AG and Japan’s Mitsubishi Heavy Industries Ltd. made competing offers to the French.
Immelt was expected to concede on a number of terms, like giving the French government a say in the fate of Alstom products that Paris deems strategic, the Wall Street Journal reported.
Under the terms of the offer, GE will take over Alstom's main coal and gas-fired steam turbine operations, but set up three 50-50 joint ventures for Alstom's grid, renewable energy and nuclear turbine business with the French government. The joint venture headquarters will remain in France.
The French had prevented GE's first offer to Alstom, which Alstom agreed to, in order to maintain French control over Alstom's nuclear business and guarantees on employment. The government then encourgaed a rival bid from Siemens, which came to a more than $11 billion cash offer with Mitsubishi Heavy Industries. That deal had propsed Siemens taking Alstom's gas turbines and Mitsubishi taking a 40 percent stake in a combined steam, grid and hydro business of Alstom.