After a protracted negotiation over the course of six weeks, complicated by a rival bid from Siemens and Mitsubishi, General Electric has emerged as the victor in a $16.9bn deal to take over French power equipment manufacturer Alstom.

All that remains in the way of the deal being sanctioned is for it to win the approval of the competition authorities, which Alstom chief executive Patrick Kron said he hoped would be concluded early next year.
The French government has also expressed its satisfaction after announcing on Sunday evening that it had agreed terms with the French conglomerate Bouygues for its purchase of a 20 per cent state stake in Alstom, worth about €1.7bn at prevailing market prices.

The government insisted on acquiring the stake as a condition of accepting the GE deal.

GE’s acquisition entails the purchase of Alstom’s coal and gas-turbine operations and creating joint ventures in the steam turbine, renewable energy and electrical-transmission businesses.

The French state will have a “golden share” in the nuclear unit, as well as assured rights over its technology. The government will impose penalties on GE if it does not meet promises to add 1000 new jobs in France over the next three years.

GE, led by chief executive Jeff Immelt (pictured), also agreed to sell its signalling business to Alstom to boost the latter’s remaining transport business, which the government feared would lack critical mass as a standalone company.

The French government has been consistently determined to ensure a say in the deal on the grounds of protecting French energy security. Arnaud Montebourg, economy and industry minister, said Alstom would have “disappeared” if the state had not stepped in to halt GE’s initial bid in April, following up later by taking powers that gave it a veto over a wide range of industrial takeovers.

“Entering the capital of Alstom will assure the alliance is properly respected, including the number of employees. There will be no knockdown sale of our interests,” Mr Montebourg said in an interview with Le Parisien newspaper.

Meanwhile, Siemens chief Joe Kaeser conceded defeat, while also noting that Alstom chief Kron had been “determined to prevent Siemens’ involvement at all costs from a very early stage”.

“Well, we have no reason to further push what is not being appreciated,” he added.

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