PARIS: France said it would defend jobs and its national interest as it met suitors eyeing a breakup of engineering group Alstom yesterday and suggested it preferred Germany’s Siemens over US giant General Electric.
President Francois Hollande held talks with GE boss Jeff Immelt yesterday morning and was due to sit down later with Siemens CEO Joe Kaeser to discuss the fate of Alstom, the maker of the country’s prestigious TGV high-speed trains and turbines for power plants.
“We won’t let Alstom sell this national champion behind the back of its shareholders, its employees and the French government,” Economy Minister Arnaud Montebourg wrote on his official Twitter account before the meetings started, accusing Alstom’s CEO Patrick Kron of “a breach of national ethics”.
Alstom, which is suffering from big debts and falling demand, was bailed out by the French government in 2004 but now needs help again. Smaller than its rivals, it was hit the hardest by a slump in orders for power equipment since the 2008 economic downturn depressed electricity prices.
Monday’s meetings follow a weekend of drama when Alstom’s German rival Siemens proposed a swap of power and rail assets to counter a potential Alstom-GE energy tie-up. Montebourg said the Siemens plan would create “two European and global champions.”
Berlin weighed in yesterday morning, saying an Alstom-Siemens deal could offer “great opportunities” for Franco-German cooperation.
Siemens also re-confirmed its interest in an Alstom deal.
After GE CEO Immelt emerged from talks at the presidential palace, the company issued a statement saying: “The dialogue was open, friendly and productive.”
It added: “It was important to hear in person President Hollande’s perspective and to discuss our plans... We understand and value his perspective, and we are committed to work together.”
Hollande and Montebourg have said their concerns are related to jobs, the nation’s energy independence, and the location of activities both in power and rail. A source familiar with the discussions said GE had offered some solutions to these concerns but that there was still a lot of work to do. Montebourg said before the meeting with GE that France would oppose any deal it considered unsuitable. But the minister — who has threatened in the past to nationalise assets belonging to steelmaker ArcelorMittal — stopped short of suggesting the state would do the same for Alstom.
“It’s too early to raise that question,” he said.
Hollande is due to meet Siemens’ Kaeser and then hold talks with Martin Bouygues, the billionaire chairman of family conglomerate Bouygues that is Alstom’s largest shareholder with a 29.4 percent stake.
Immelt arrived in Paris during the weekend, aiming to hammer out a $13bn deal to buy Alstom’s power turbines business. News of talks between the two surfaced last week and sources with knowledge of them say they have been going on for months and are very advanced. However Siemens may also be working on refining its proposal, a second source with knowledge of the talks said.
“It is clear that Siemens wants to remain in the race. They could come back with a more binding offer or with another, more detailed letter addressing some of the issues pointed out in the press, such as antitrust and jobs.”
Analysts see sense in an Alstom-GE tie-up. Reuters
