The French government said Monday that it would oppose General Electric’s friendly $13.5 billion offer for a large portion of Alstom, the country’s largest industrial conglomerate, saying the deal should be reconfigured on a more equitable footing, reports The New York Times.
Alstom announced last week that its board had unanimously endorsed General Electric’s offer for its power generation and transmission businesses, but the government, concerned about having a national industrial champion disappear into the vastness of the American colossus, has balked.
‘‘While it is natural that G.E. would be interested in Alstom’s energy business,’’ France’s economy minister, Arnaud Montebourg, said in a letter to Jeffrey R. Immelt, the G.E. chairman and chief executive, ‘‘the government would like to examine with you the means of achieving a balanced partnership, rejecting a pure and simple acquisition, which would lead to Alstom’s disappearing and being broken up.’’
The government’s legal means for stopping a deal would appear to be limited, though it could refuse to approve such an investment on national security grounds. The government does not hold Alstom shares, but the company is considered important enough to have received a 2.2 billion-euro bailout in 2005. And Mr. Montebourg noted in the letter Monday that the government was Alstom’s most important customer.
Alstom’s energy units, which make turbines for nuclear, coal and gas power plants, as well as the grid infrastructure to deliver electricity, contribute about three-quarters of its 20 billion euros, or about $30 billion, in the company’s annual sales.
The letter, sent by Mr. Montebourg on behalf of President François Hollande and obtained by The New York Times, continued: ‘‘As it stands, we unfortunately cannot support the proposals you have made,’’ adding, ‘‘based solely on the acquisition of Alstom’s activities in the energy domain.’’
In the letter, Mr. Montebourg reiterated Alstom’s importance to the country’s nuclear industry, saying it justified a close examination of any foreign investments, as ‘‘France must maintain its technological sovereignty.’’
Read more of this report from The New York Times.
Read Mediapart's coverage of the proposed takeover here.