GE Offers $13.5 Billion Enterprise Value to Acquire Alstom Thermal, Renewables, and Grid Businesses

  GE Offers $13.5 Billion Enterprise Value to Acquire Alstom Thermal,
  Renewables, and Grid Businesses

  *$13.5B enterprise value, all-cash transaction valued at 7.9x pro forma
    EBITDA (12 months ending September ’13)
  *Immediately accretive to GE earnings; incremental $.08-$.10 of earnings in
    2016; expect approximately 75% of operating earnings from GE Industrial by
  *Integration will yield efficiencies in supply chain, service
    infrastructure, commercial reach, and new product development to generate
    more than $1.2B in annual cost synergies by year five
  *Strong operating assets that bring complementary technology, global
    capability, a large installed base and talent to GE
  *Enhances GE’s long-term growth opportunities in growing global power
  *Improves customer productivity through total power plant & integrated grid
  *HQs & global COEs for steam turbines, hydro, offshore wind, and grid
    businesses in France; COE for 50Hz gas turbines in Belfort
  *Net growth in jobs in acquired businesses in France with remix to more
    engineering and manufacturing

Business Wire

PARIS -- April 30, 2014

GE (NYSE:GE) and Alstom announced here today that GE has submitted a binding
offer to acquire the Thermal, Renewables (“Power”) and Grid businesses of
Alstom (ALO.PA) consisting of $13.5 billion (€9.9 billion) enterprise value
and $3.4 billion (€2.5 billion) of net cash, totaling $16.9 billion (€12.35

The Alstom board of directors has positively received GE’s offer and has
appointed a committee of independent directors led by Jean-Martin Folz to
review the transaction by June 2. If this review concludes positively, an
exclusivity period beginning no later than June 2 will be granted and the next
steps will include Works Councils consultation, Alstom shareholder approval in
a shareholder meeting, and customary regulatory approvals. Bouygues S.A., a
29% non-controlling shareholder of Alstom, supports the transaction. Although
the transaction involves the acquisition of Alstom’s Power and Grid
businesses, GE’s offer, typical of a public company transaction, permits the
board of Alstom to consider unsolicited alternative proposals for the
acquisition of Alstom, or of the Power and Grid businesses.The deal is
expected to close in 2015.

Transaction details

The all-cash transaction is valued at 7.9 times pro forma earnings before
interest, taxes, depreciation and amortization (EBITDA) of Alstom’s Thermal,
Renewables, and Grid business units. GE expects the acquisition to be
accretive to earnings in the first year; it is expected to add $.08-$.10 of
earnings in 2016; and approximately 75% of operating earnings is expected to
come from GE Industrial by 2016.

Creating investor value

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. We respect
and value the deep industry and technology expertise of Alstom employees and
expect them to add to our proven track record of developing talent and
leadership in France and globally.”

Immelt continued, “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. We expect a collaborative and
prompt integration that will yield efficiencies in supply chain, service
infrastructure, commercial reach, and new product development. We expect these
actions will generate more than $1.2B in annual cost synergies by year five
and the transaction will be immediately accretive for GE shareholders.”

Immelt concluded, “GE has an excellent track record of creating shareholder
value from investments in Europe. In France, this includes our longstanding
CFM aircraft engine joint venture with Snecma (Safran); our acquisition of
Thomson-CGR, a healthcare center of excellence for GE; and our 1999
acquisition of Alstom’s gas turbine business in Belfort, which today is GE’s
technology center of excellence for 50 Hz gas turbines. Across Europe, we have
built strong global competitors from European champions in Oil & Gas, Aviation
and Healthcare.”

Patrick Kron, Chairman and CEO of Alstom, commented: “The combination of the
very complementary energy businesses of Alstom and GE would create a more
competitive entity to better service customer needs. Alstom’s employees would
join a well-known, major global player, with the means to invest in people and
technology to support worldwide energy customers over the long term. The
proposed transaction would allow Alstom to develop its Transport business as a
standalone company, with a strong balance sheet to capitalize on opportunities
in the dynamic rail transport market.”

Creating customer value

Alstom’s Power business provides equipment and services for integrated power
plant solutions for a variety of energy sources, including steam, hydro, coal,
gas, nuclear steam, wind, and other forms of renewable energy. In fiscal year
2013, the business had €11 billion ($15 billion) in sales and €1.05 billion
($1.4 billion) in income from operations, and 46,000 employees.

Steve Bolze, CEO of GE Power & Water, said, “As we continue to benefit from
rising global demand for power generation in key growth regions, we see power
generation customers increasingly buying total power plant solutions,
maximizing their efficiency. By combining our complementary gas and steam
turbine technologies, GE will help customers achieve better performance from
their existing and new power plants, enabling more accessible, affordable and
sustainable power for people everywhere.”

Alstom’s Grid business offers Transmission & Distribution solutions to support
the build-out of the power grid in emerging economies and replacement of aging
electrical infrastructure. Alstom’s Grid business generated €3.8 billion ($5.2
billion) in sales and €0.2 billion ($0.3 billion) in income from operations in
fiscal year 2013, with 18,000 employees.

Investing in France

GE said today that France will be the center of its European power business
with headquarters and centers of excellence here for its steam turbine, hydro,
offshore wind and grid businesses. GE plans that its Belfort site would remain
the center of excellence for 50 Hz gas turbines. GE also anticipates net
growth  in jobs in acquired businesses in France, with the employee mix moving
toward high-value manufacturing and engineering jobs.

GE will discuss the transaction on a webcast at 8:30 am ET on April 30, 2014,
available at Related charts will be posted prior to the

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