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France Warns Alstom Against Hasty GE Deal

Stocks in this article: GE SI

By Greg Keller

PARIS -- French President Francois Hollande met Sunday with top members of the government to discuss Alstom, hours after the economy minister warned the engineering company not to pursue a "precipitous" tie-up with U.S. giant General Electric (GE).

Hollande met with Economy Minister Arnaud Montebourg and Prime Minister Manuel Valls at the Elysee palace, according to a statement from the president's office. Energy Minister Segolene Royal also took part in the meeting to discuss Alstom's jobs, industrial presence and the impact on France's energy independence, according to the statement.

Earlier Sunday, Montebourg said France's national interest is at stake in a potential sale of engineering giant Alstom, warning the company against making a hasty deal with General Electric.

Meanwhile, Alstom said in its own statement late Sunday that it will request that trading in its stock, which was suspended Friday, remain suspended pending a statement it said would come "no later than Wednesday 30 April."

Montebourg said in a statement that the government wants time to examine a separate offer from German rival Siemens (SI) aimed at creating two "European champions" in transport and power engineering.

Montebourg said that "given the strategic stakes for French industry and economy, the government won't accept any precipitous decision made without taking account of alternative choices in the national interest."

The government "wants to have the time to make a serious examination of the proposals," Montebourg said.

Last week, unsourced rumors in the French media suggested that GE and Alstom were preparing to announce a tie-up as early as Monday.

Earlier Sunday, Siemens said it was prepared to discuss a tie-up with rival Alstom.

Siemens says it sent the Alstom board a letter "to signal its willingness to discuss future strategic opportunities," but declined to elaborate.

Montebourg said the government is "ready to examine" both GE's and Siemen's proposals "with the aim of preserving the interests of France's industrial base" and said the government was "ready to take part financially" in a deal.

The move announced Sunday comes amid heated speculation that General Electric is considering buying Alstom.

Shares in Alstom were halted Friday after its stock closed nearly 11% higher Thursday at 27 euros.

The French government is cool to the idea of a buyout of the company, which pioneered TGV high-speed trains, later exporting them around the world, and which builds power-generating turbines.

Alstom and GE spokespeople declined to comment on reports in the French press that GE chief executive Jeffrey Immelt was to meet with French government representatives on Sunday in Paris.

GE has long roots in France. Its French division posted 7.8 billion euros in revenue in 2011, the last year for which figures were available on the group's website. GE employs 11,000 people in France, with three main industrial centers in Belfort, Buc and Creusot. GE is also part of a 40-year-old joint venture with French defense contractor Snecma, called CFM International, which makes jet engines for airlines and military forces around the world.

Associated Press writer Frank Jordans in Berlin contributed to this report.

Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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