Alstom Shares Fall as Company Deemed to Pay U.S. Bribery FineFrancois de Beaupuy
Alstom SA shares fell as much as 3.9 percent after Chief Executive Officer Patrick Kron said the burden of paying energy-project bribery fines in the U.S. will fall on the French company and not General Electric Co., which is acquiring the assets involved.
An agreement with the U.S. Department of Justice may be found soon, Kron said at a shareholder meeting in Paris today, during which shareholders approved the sale of the French trainmaker’s energy units for an equity value of 12.4 billion euros ($15.1 billion).
“The DOJ should request that any fine remain with Alstom,” Kron said. Combined with unrelated positive impacts of adjustments that were recently made to the deal with GE, the overall negative impact for Alstom should be worth 1 percent to 2 percent of the transaction, the CEO said today.
Alstom, based in Levallois-Perret near Paris, is close to settling a bribery case with the U.S. Justice Department for a record $700 million, three people familiar with the matter told Bloomberg this month. The probe of Alstom has centered on a $118 million contract to provide boiler services at a power plant in Tarahan, on the southern coast of Sumatra.
Kron had previously said GE would assume liabilities of the energy assets it’s acquiring from Alstom, and an Alstom document presented at today’s shareholder meeting also stated that “by taking over Alstom’s Energy businesses, General Electric undertakes to take on all liabilities and risks exclusively or predominantly associated with said businesses.”
Alstom shares traded down 3.9 percent at 26.65 euros at 3:06 p.m. in Paris.