France gives green light to GE takeover of Alstom

The French government gave its stamp of approval on Wednesday for the sale of Alstom's energy arm to US group General Electric, a move that seemed unlikely earlier in the year.

France gives green light to GE takeover of Alstom
The French government gave its authorisation for the controversial GE Alstom deal on Wednesday. Photo: AFP

France's Economy Minister Emmanuel Macron on Wednesday authorised the sale of most of Alstom's energy assets to US group General Electric, clearing the way for a deal worth almost $17 billion.

"Emmanuel Macron … today gave his authorisation to General Electric (GE) for the realisation of its investment project in France with Alstom and the creation of an industrial alliance between the two groups in the energy sector," said a statement from his ministry.

A shareholders' general meeting would be held on December 19 on the deal, the French company said.

French government approval of the deal was needed because of a May decree that gives Paris veto rights over foreign bids for "strategic" French companies, notably those in the energy and transport sectors.

Alstom is involved in power generation and building rail systems.

The economy ministry said it was satisfied that "state interests" in France's nuclear activities and energy security were "fully taken into account" under the deal.

GE in June won a fierce two-month battle to buy most of Alstom's energy assets, which represent around 70 percent of the French conglomerate's revenues, for $16.9 billion (worth €12.35 billion at the time).

Alstom, which plans to concentrate more on its rail business, will buy a railway signalling unit from GE, and the two groups will start joint ventures to develop renewable energy, electricity grids and steam turbines.

The French group on Wednesday released its half-year fiscal results for April to end-September that showed a 32 percent drop in net income to €255 million.

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US giant GE to pay France €50 million after creating just 25 jobs out of 1,000

The French government announced Tuesday that US industrial conglomerate General Electric will pay €50 million ($57 million) after falling short of its goal of creating 1,000 new jobs in the country.

US giant GE to pay France €50 million after creating just 25 jobs out of 1,000
Alstom employees protest in front of the France's Ministry of Finance in Paris. Photo: AFP

GE had pledged to create the jobs by the end of last year as part of its 2015 purchase of the power and electrical grid businesses of France's Alstom.

But shortly after closing the deal GE unveiled a series of job cuts across Europe as slumping oil and gas prices crimped demand for its heavy-duty turbines and other equipment.

The company had already warned last year that it wouldn't meet the target, though the new CEO Larry Culp confirmed in October that GE would “fulfil its commitments.”

It had promised to pay €50,000 for every job not created over the three-year period.

The French finance ministry said after a meeting with GE officials Tuesday that the firm had created just 25 new jobs overall, meaning it would pay €50 million into an industrial development fund.

“GE underscored the significant of its continual investments in France during the period, and noted that despite the particularly difficult business climate, the group had done its utmost to create jobs,” the company said in a statement.

It pointed to a $330 million investment in offshore wind turbines in France announced last year, which it expects to eventually create 550 new jobs.

But union sources said last month that GE was planning to cut nearly 470 jobs, at its Alstom Power Systems GE Energy Power Conversion units.

Under Culp the company has been trying to get its power operations on more solid financial footing, with plans to cut costs further and reduce debt.

Last week it posted a $574 million profit for the fourth quarter, a welcome turnaround from the $11 billion loss a year earlier.