Last snag cleared in GE’s bid in France

Economy Minister Arnaud Montebourg: A deal turned on a state stake in Alstom.
Dmitry Kostyukov/New York Times
Economy Minister Arnaud Montebourg: A deal turned on a state stake in Alstom.

PARIS — The last major obstacle to General Electric Co.’s $13.5 billion acquisition of Alstom’s energy assets fell Sunday, when France’s government agreed to buy a stake in the French industrial conglomerate from the billionaire Bouygues family.

On Saturday, Alstom’s board unanimously backed GE’s offer to buy the energy business, which makes power-generation equipment and the electrical grid to deliver energy to customers. But the French government had changed the game Friday by insisting it would take a 20 percent stake in the remaining bits of Alstom.

Disagreement with the Bouygues family, which owns 29 percent of Alstom, about the price of the stake had raised the possibility the deal would fail.


But late Sunday, the French Economy Ministry said the state holding company, Agence des Participations de l’État, and the Bouygues had agreed to give the French government the option to buy up to 20 percent of Alstom “at the market price with a standard discount, on condition that this price is higher or equal to the equivalent of a theoretical adjusted price of 35 euros per share.”

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At 35 euros, or $47.60, a share, Bouygues has extracted a 25 percent premium to Alstom’s closing price on Friday. The Bouygues, who also control a large construction and engineering company, had a certain leverage, as the government needed to close the sale before the opening of the Paris bourse on Monday.

The disagreement about price had raised anxieties that the deal — already the subject of intense political machinations, including the solicitation by the French government of a rival offer from Siemens and Mitsubishi Heavy Industries — might founder.

Economy Minister Arnaud Montebourg had cautioned that a final agreement was contingent on the state’s buying a stake in Alstom, which would be left as a holding company after the deal, housing three 50-50 joint ventures with GE and an expanded rail transport business, bolstered by the addition of Connecticut-based GE’s rail signaling unit.

General Electric declined to comment.