NEW YORK – General Electric inched closer to buying the energy-related businesses of France’s Alstom by making a $16.9 billion bid, but rival offers and the concerns of French politicians may hold up or scuttle the deal.
GE’s bid, announced Wednesday, has been endorsed by Alstom’s board, but the board will wait up to a month to formally accept or reject it. GE would obtain the parts of Alstom that make and service electric power generation and transmission equipment. Alstom would keep its transportation division, which makes high-speed trains.
GE, which plans to phase out its Fort Wayne operations next year, values the acquisition at $13.5 billion because it will acquire $3.4 billion of Alstom’s cash if the deal closes.
But the deal is far from done. France’s government, which regularly intervenes in corporate decision making, has questioned whether selling Alstom to GE threatens the country’s energy independence and jobs. Alstom has convened independent board members to examine GE’s proposal.
Officials in France had pressed for a delay to allow GE’s German rival, Siemens, time to form its own bid. Siemens said in a statement Tuesday that it would make an offer if Alstom allowed it access to company data and allowed it to research the idea.
Alstom’s board said it unanimously recognized the GE deal’s strategic and industrial merits, and Alstom called the deal practically perfect.
GE CEO Jeff Immelt told investors Wednesday that Alstom contacted GE about a deal. He said the company doubted it was large and spread out enough to remain profitable in global energy long-term.
The deal would put GE back into businesses it has abandoned, including equipment that generates electricity in hydroelectric plants and with steam in coal-fired and nuclear plants.