General Electric (NYSE: GE) announced that it has agreed to extend the deadline for consideration of its Alstom acquisition proposal to June 23. In April, GE submitted a binding offer to acquire Alstom’s thermal, power and grid businesses for $16.9 billion (€12.35 billion). The original deadline for consideration of GE’s offer was June 2.
In a brief statement released May 22, GE outlined extension of the consideration period was put forth to enable ongoing consultations with the French government and viewed positively by the company.
“At the request of the French government, we have agreed, in consultation with Alstom, to extend the deadline for consideration by the Alstom board of our proposal until June 23. We have done so to facilitate ongoing discussions with the government," said GE. "The industrial project we have presented is good for Alstom, for France and for GE, and our discussions have continued to be constructive. We view this extension positively.”
If finalized, GE’s acquisition would represent a very rare circumstance in which a U.S. competitor would take control of a French industrial major. The French government has been extremely vocal in its concerns surrounding GE’s offer, initially branding the deal unacceptable and going as far as introducing a decree that would allow it the power to veto foreign takeovers.
While analysts have come forth saying the French government’s reaction to GE’s offer has been one mostly steeped in patriotic posturing, French officials maintain its focus is on the preservation of French jobs and ingenuity.
Meanwhile, German major Siemens (NYSE: SI) remains a strong possible competitor with rumored plans for a proposal that would include an offering of the company’s transport assets with an additional cash payment in exchange for Alstom’s power business.
In an effort to garner government support, heads from both GE and Siemens met have with French President François Hollande and others to discuss French interests and smooth the way for any proposals. As things stand, the French government is said to prefer an Alstom deal with Siemens, which it claims would see less jobs cuts and position Alstom as a European transport major. However, such a deal would still face significant hurdles in gaining regulatory approval under stringent EU anti-trust laws.