France warns Alstom against ‘precipitous’ deal with GE, says national interest at stake

PARIS – France’s national interest is at stake in a potential sale of engineering giant Alstom, the economy minister said Sunday, warning the company against making a hasty deal with General Electric Co.

Arnaud Montebourg said in a statement that the government wants time to examine a separate offer from German rival Siemens 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 rumours 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 its French 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 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 Co. is considering buying Alstom.

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

The French government is cool to the idea of a buyout of a company that pioneered TGV high-speed trains, later exporting them around the world, and builds nuclear 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 employees 11,000 people in France, with three main industrial centres in Belfort, Buc and Creusot. GE is also part of a 40-year-old joint venture with French defence contractor Snecma, called CFM International, which makes jet engines for airlines and militaries around the world.

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

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