France’s government has again rejected General Electric’s $13.5 billion bid for the Alstom energy business, despite Alsom’s board approving the deal. Alstom is one of France’s flagship companies that specialises in power generation and transportation manufacturing. This includes nuclear power plants, hydroelectric plants and gas turbines. Furthermore, their transportation manufacturing division has built the Eurostar trains as well as France’s TGV and AGV. In the 2012-13 financial year, their turnover was a little over 20 billion Euros with approximately 93,000 employees.
Alstom is a troubled company that was bailed out by the French government some ten years ago, hence their current intervention. “While it is natural that G.E. would be interested in Alstom’s energy business, the government would like to examine with you the means of achieving a balanced partnership, rejecting a pure and simple acquisition, which would lead to Alstom’s disappearing and being broken up.” France’s economy minister, Arnaud Montebourg, said in a letter to Jeffrey Immelt, the G.E. chairman and chief executive.
A fair argument to reject the bid, one could argue. France, like most mainland European nations, fights hard to keep companies of national pride away from foreign buyers. In 2005, France successfully warded off a 30 billion Euro bid from PepsiCo to acquire Danone, drafting a law to protect ‘strategic industries’.
France has called on Siemens to enter the battle to save Alstom, potentially creating a European energy champion. Siemens itself is to undergo one of the largest restructurings in its history. They are expected to unveil a leaner, flatter structure that will put an end to the firm’s four big divisions – industry, energy, healthcare and infrastructure/cities. Roughly 10 smaller divisions will take their place, including new ones focused on industrial software and digital production processes. Siemens is expected to confirm the purchase of Rolls-Royce’s energy business for around 1 billion euros in the coming weeks.