Alstom board backs bid by General Electric

The board of directors of French power-to-rail group Alstom on Saturday unanimously approved US conglomerate General Electric’s bid to acquire its energy business.

“The board of directors unanimously decided to issue a favourable opinion of GE’s offer” and will begin consultations with personnel, a statement said.

The statement comes a day after the French government stepped firmly into the battle over Alstom, saying it favoured General Electric’s 12.35 billion euro ($16.8 billion) bid for Alstom, while also announcing a surprise caveat that it would take a 20 per cent controlling stake to preserve French strategic interests in its industrial jewel.

The French government plans to acquire that 20 percent stake by purchasing two-thirds of the shares owned by another French group, Bouygues.

Discussions on the price were ongoing on Saturday, a source close to the deal told AFP.

Economy Minister Arnaud Montebourg said Friday he had sent a letter of intent to GE head Jeff Immelt laying out the terms of the alliance, chosen over a rival offer from Germany’s Siemens and Japan’s Mitsubishi Heavy Industries.

French Prime Minister Manuel Valls also hailed the sweetened GE offer, which includes a government veto over sensitive nuclear energy technology.