Montebourg exerts more control over potential Alstom deal

France has taken steps with its national legislation to ensure tighter control over foreign investment, in a move which could impact a potential takeover of Alstom by GE.

Foreign investment will now need government approval in key areas such as energy, equipment, plants and transportation that are critical for national security and health, according to a decree signed yesterday by French Economy and Industry Minister Arnaud Montebourg.

“If needed, the government will be able to ask specific commitments or set conditions for investments to warrant the interests of the country,” Montebourg said in a statement today.

According to Bloomberg the action may add more pressure to GE to improve on its existing $17bn bid for Alstom, and also gives Mr Montebourg more time to persuade his preference for Siemens Energy to provide an alternative deal

Alstom CEO Patrick Kron is backing GE’s offer, conceding that the French company lacks the critical mass to compete with its larger US rival as well as Siemens and emerging market power-equipment suppliers. Alstom has given its board until the end of the May to review GE’s bid and any rival offer.
Montebourg
“In one swift move, Montebourg has made himself key to determining Alstom’s fate, while rebalancing power around the GE-Alstom-Siemens negotiating table,” said William Mackie, an analyst at Berenberg. “With this new law, the risk that GE will reconsider its position increases, since additional concessions on a GE-Alstom deal will be sought.”

French Energy Minister Segolene Royal yesterday said the government has no preference on Alstom bids and added that offers are improving, without elaborating.

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Foreign investment will now need government approval in key areas such as energy, equipment, plants and transportation that are critical for national security and health, according to a decree signed yesterday by French Economy and Industry Minister Arnaud Montebourg.

“If needed, the government will be able to ask specific commitments or set conditions for investments to warrant the interests of the country,” Montebourg said in a statement today.

According to Bloomberg the action may add more pressure to GE to improve on its existing $17bn bid for Alstom, and also gives Mr Montebourg more time to persuade his preference for Siemens Energy to provide an alternative deal

Alstom has given its board until the end of the May to review GE’s bid and any rival offer.

“In one swift move, Montebourg has made himself key to determining Alstom’s fate, while rebalancing power around the GE-Alstom-Siemens negotiating table,” said William Mackie, an analyst at Berenberg. “With this new law, the risk that GE will reconsider its position increases, since additional concessions on a GE-Alstom deal will be sought.”

French Energy Minister Segolene Royal yesterday said the government has no preference on Alstom bids and added that offers are improving, without elaborating.

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