GE boss to meet French minister as Alstom deal progresses

Apr 26 2014, 21:41 IST
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SummaryGeneral Electric boss Jeff Immelt is due in Paris on Sunday and is expected to meet France's economy minister...

General Electric boss Jeff Immelt is due in Paris on Sunday and is expected to meet France's economy minister as he closes in on a deal to buy the global power arm of struggling French engineer Alstom, sources close to the matter said.

Several sources close to talks between the companies said on Friday a transaction could be announced in days. Some put a $13 billion valuation on Alstom's turbines and power grid equipment business.

Sources close to the government who flagged the likely meeting between economy minister Arnaud Montebourg and Immelt said Prime Minister Manuel Valls might also meet the chief executive, who heads one of the 10 largest investor-controlled companies in the world, should the more senior politician return from a visit to Rome in time.

French media said a decisive Alstom board meeting, the second since Friday, would also take place on Sunday.

Socialist Montebourg has been a strong exponent of France's traditionally cautious approach to foreign takeovers of companies in flagship industries.

Last week he said he would protect the national interest and study "other solutions and scenarios" for Alstom, also the maker of TGV high-speed trains and one of France's top private-sector employers, which is struggling with heavy debt and weak demand.

However, one source close to the talks said the government had been looking for alternatives for months without success "so I don't see what they will find now".

Nevertheless, political sensitivities run deep.

"I ask you, prime minister, to please tell the shareholders and management of the groups concerned that this transfer of control is out of the question," former Socialist minister Jean-Pierre Chevenement said in an open letter to Valls published by Les Echos newspaper on Saturday.

Montebourg met Alstom chief executive Patrick Kron on Thursday and said on Friday he would meet "shortly" with Immelt.

An industry source close to the talks said GE would argue there was not much concern about job cuts in France, where Alstom employs 20 percent of its workforce, some 18,000 people. The source noted that in gas turbines, for example, GE has its own gas turbine making business in France while some of Alstom's is in Switzerland.

"The French state is asking for assurances from GE, all that is a game that implies a discussion around the disappearance of national champions," said the source. "Conversely, GE will try not to offer too much."

Sources have said a deal is backed by Alstom's main shareholder, French conglomerate Bouygues

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