Immelt Hopes GE Has ‘Fair Chance’ in Alstom TalksRichard Clough
General Electric Co. Chief Executive Officer Jeffrey Immelt said he’s “hopeful that we will receive a fair chance” in talks with the French government about the company’s $17 billion offer for Alstom SA’s energy business.
Immelt said yesterday in a blog post sent to employees that GE has invested heavily in France and he’s confident now in the company’s chances to acquire Alstom. The post came after French President Francois Hollande publicly called on the Fairfield, Connecticut-based company to revise its Alstom offer to improve jobs guarantees.
“France has been an important country for GE for more than 50 years,” Immelt said. “The government knows GE well, and has been a good partner. We think this will be a good investment for France, and I am hopeful that we will receive a fair chance to explain our views.”
GE last week offered $17 billion for the Alstom units that make turbines and energy-grid products. Under the terms of the deal, the French company would keep its transport division, which makes the high-speed TGV trains and represents less than 30 percent of sales.
GE, which said the purchase would lead to a net growth in French jobs, acquired an Alstom plant in 1999, a move Immelt said “has been a big success for the company and the people.”
Germany’s Siemens AG said it plans to make a competing bid, swapping most of its rail business for Alstom’s energy assets. The Munich-based company asked Alstom to give it access to its books before Siemens makes a formal offer.
Hollande, under pressure to protect jobs amid record-high unemployment, and other French officials said this week that GE’s proposal does not go far enough to protect France’s strategic interests.
“It’s not sufficient, so it’s not acceptable,” Hollande said in an interview on RMC radio and BFMTV yesterday. “There is another offer and we will see if it will be a better one.”
Alstom was saved from bankruptcy about a decade ago by the state and employs 18,000 people in France. The company, long a symbol of French industry, is important for the country’s energy independence, its government has said.
After a meeting on April 28 between Hollande and Immelt, the French government said it didn’t oppose GE’s bid, a person familiar with the matter said at the time. The main criteria for the government are guarantees about jobs, the location of operations and energy independence, Hollande told Immelt at that meeting, the person said.
GE’s shares rose 1.3 percent to $26.53 at the close in New York. Alstom increased 0.7 percent to 28.92 euros in Paris. Siemens advanced 2.1 percent to 95.84 euros in Frankfurt.