GE got approval from Bouygues, shareholders of energy assets of Alstom, to sell 20 percent of its company stakes to France state.
This will enable GE to complete $ 17 billion takeover of Alstom SA (ALO), reported Bloomberg.
Bouygues has met all conditions set by the France government to support the deal and Alstom has approved the purchase offer from GE group of companies.
GE has planned to buy gas turbine operations from Alstom that will create joint ventures in steam turbine, electrical transmission and renewable energy segments of the market in future. Through this deal Alstom will benefit from GE’s rail signalling operations worth 602 million euros, reported the news media.
Alstom, based in Paris suburbs, assemble power grids, manufacture high-speed trains and generators needed for the electricity production of the country. Renowned as nation’s industry icon with such technical expertise, Alstom was the final choice for government’s pursuit for an equity stake, added the report.
With the sales proceedings, company has plans to strengthen the business, return cash to shareholders, and invest 2.5 billion euros in other segments like steam turbines and power-transmission gear of GE projects.
Bouygues’s current stake with the company is 29 percent which the French company values at 34 euros per share. France is planning to buy its stake at market price with a standard discount.
GE revised the terms when the first proposal was rejected and sent senior officials led by GE CEO Jeffrey Immelt to meet government officials. GE refined its proposal by offering alliances in nuclear technology and rail adding safeguards of creating 1000 additional vacancies locally.
The government asked GE to give reference to the European solution and to strengthen the ability of government to fit itself into acquisitions in refined proposal. Sale of GE’s rail-signalling operations was amalgamated with Alstom transportation, as a concession granted by government.
editor@greentechlead.com