May 20 (Bloomberg) -- French state-controlled nuclear company Areva SA would consider buying Alstom SA’s wind energy business if those assets come up for sale as part of a deal with General Electric Co. or Siemens AG.
“If opportunities arise in the future, of course, given Areva’s ambition in renewable energies, we should be ready to study possibilities in this overall deal,” Chief Executive Officer Luc Oursel told lawmakers at the National Assembly in Paris today.
GE is in early-stage talks with Areva and other French companies about asset sales or partnerships, people familiar with the matter said last week. Areva has been in contact with potential buyers of Alstom’s energy units, Oursel said today. The talks were “essentially” coordinated by the French government, he said.
The French government is seeking to extract concessions from Fairfield, Connecticut-based GE -- which is offering $17 billion for Alstom’s energy units -- and is also pushing Germany’s Siemens to make a rival offer.
President Francois Hollande is demanding that GE sweetens its offer to protect jobs and seeking insurance that a deal wouldn’t hurt France’s nuclear industry. Economy Minister Arnaud Montebourg has said he prefers a Siemens proposal to swap most of its rail business for Alstom’s energy assets in a deal that would form two leading European companies in energy and rail technology.
PSA Peugeot Citroen’s sale of stakes to France and China’s Dongfeng Motor Corp. is a model for future foreign investments, Montebourg said separately today. Both are buying about 14 percent in the troubled carmaker.
France last week passed legislation extending the government’s ability to block foreign takeovers into the fields of energy, transport and health care.
The decree was a “decision to put an end to a form of laissez faire,” Montebourg told the National Assembly today. “Our companies aren’t prey, but they need alliances. They’re not available for dismantling -- particularly when they have our strategic interests in their hands.”
The move by Montebourg, an admirer of Louis XIV’s dirigiste finance minister, Jean-Baptiste Colbert, follows a long tradition of French state intervention in business and is aimed at capping unemployment as the country struggles with a stagnant economy and record-high joblessness.
“GE has told us that they want to improve their proposal by taking our requests into account,” Montebourg told journalists after the hearing. “I don’t know what they are able to do.”
Alstom CEO Patrick Kron reiterated today that he backs GE’s offer, saying that his company lacks the critical mass to compete with its larger U.S. rival, Siemens and emerging market power-equipment suppliers.
“The process which is starting is rigorous, fair and transparent,” Kron told the National Assembly. “A stand-alone strategy would be dangerous.”
Alstom has given its board until June 2 to review GE’s bid and any rival offer.
Alstom is a “key supplier” of the steam turbine for Areva’s EPR nuclear reactor, and “it’s absolutely key that we have the possibility to keep working with this turbine which is particularly liked by customers,” Oursel said.
Alstom is supplying the steam turbine in three out of four EPR nuclear reactors under construction while Siemens is supplying one. Alstom has also been selected by Electricite de France SA to supply turbines for the two EPRs it plans to build in the U.K.
In a letter to Hollande, GE CEO Jeffrey Immelt pledged he’s ready to work with the state, Areva and EDF to protect the nuclear sector and preserve France’s exports. Immelt also said GE would study potential French bids for Alstom’s onshore and offshore wind business, and welcome local investors in Alstom’s unit that makes turbines for dams.
For Areva, which is merging its unprofitable offshore wind turbine business with that of Spain’s Gamesa Corp. Tecnologica SA to share costs, buying Alstom’s offshore wind business would eliminate a rival that was selected by EDF for a 2 billion-euro ($2.7 billion) contract to supply three wind farms in the country.
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