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GE Dangles Alstom Alliance Before French Lawmakers

Stocks in this article: GE

NEW YORK (The Deal) -- General Electric (GE) CEO Jeffrey Immelt met French President Francois Hollande on Wednesday to sell the U.S. group's 11.4 billion ($15.5 billion) bid for Alstom's energy operations, a day after surprising French lawmakers with the offer of a business partnership with the French state.

Immelt made an unscheduled appearance Tuesday at France's National Assembly during a discussion about Alstom's future, declaring that GE was "open to an investment by the French government in a business alliance."

The CEO gave no details of the offer but it is likely to center on co-investment in Alstom's wind energy or hydroelectric operations, according to a GE source who asked not be named.

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Immelt met Hollande, Industry Minister Arnaud Montebourg and Energy Minister Segolene Royal at the Elysee Palace on Wednesday morning. The CEO is facing a battle to win the support of French ministers, notably Montebourg, who has said that he would prefer to see Alstom swap its energy division for rail assets owned by Germany's Siemens.

Siemens also made its case for a deal on Tuesday, when its head of French operations told the National Assembly that the Munich-based company was preparing to file a proposal to create an "alliance" with Alstom by June 16.

"The capacity to create two European giants of that size won't show up twice," Siemen's Christophe de Maistre told the hearing on Tuesday.

Siemens has already indicated its offer will be premised on swapping its train manufacturing assets for Alstom's energy business.

It is considering adding its rail signaling business to the offer and will guarantee all Alstom employees jobs in France for three years, de Maistre said on Tuesday.

Siemens' bid may also include 7 million in cash, Reuters reported Tuesday, without citing its source. Siemens spokespeople were not immediately available to comment.

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