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French energy minister defends GE offer for Alstom
May 14, 2014 / 10:30 AM / 4 years ago

French energy minister defends GE offer for Alstom

PARIS, May 14 (Reuters) - The offer made by U.S. conglomerate General Electric to take over Alstom’s power arm is “a very good opportunity” for the engineering group, French Energy Minister Segolene Royal told weekly magazine Paris Match.

Cash-strapped Alstom has welcomed GE’s offer to buy its power turbines and grid business for 12.35 billion euros ($16.9 billion), but the French government has weighed into the talks in an attempt to get better offers. Alstom has given itself until the end of the month to review its options.

Royal’s comments strike a markedly different tone from those of Economy Minister Arnaud Montebourg, who has openly criticized an Alstom-GE deal and instead advocated a European tie-up with Germany’s Siemens.

“General Electric is a very good opportunity for Alstom. It’s the best industrial project. Why not say it?” Royal, who is also President Francois Hollande’s ex-partner, told Paris Match in an interview due to be published on Thursday.

“And why do we always try to scare away foreign investment? We actually really need it,” she added.

On Wednesday morning, Royal qualified the comments reported in the interview, writing on her Twitter account that she was meeting Siemens CEO Joe Kaeser and liaising with Montebourg. “The Franco-German project is making good progress,” she wrote.

Montebourg has repeatedly talked up the prospect of an alternative Alstom-Siemens tie-up despite resistance from both firms, which are long-time rivals.

Siemens, which has been given four weeks to study Alstom’s finances before committing to a formal offer, said last week it would not be forced into a bidding war with GE.

Under the government’s pressure to improve its offer, General Electric has already entered talks to sell minority stakes in Alstom’s wind and hydroelectric businesses, said a source close to the talks.

When detailing GE’s bid, CEO Jeff Immelt had signaled in a letter to Hollande that the U.S. group was willing to work with the government and to sell Alstom’s wind turbine activities to French investors. Areva has been cited in newspaper reports as a likely buyer but has declined to comment.

A spokesman for GE France declined to comment on Royal’s comments. Alstom declined to comment beyond saying the committee of independent directors it had set up to review the GE bid was at work and that Siemens had still not made a formal offer. ($1 = 0.7296 Euros) (Reporting by Natalie Huet; Editing by Andrew Callus)

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