Alstom mulls $16.5bn sale of power business to GE
Siemens has made declaration of interest and may make counter offer.
The board of Alstom has received a US $12 billion offer from General Electric (GE) for its energy business.
The deal would include its thermal power, renewable power and grid businesses, which has 65,000 employees and €14.8 billion in sales between then in fiscal 2012/13.
If the company accepts the offer, Alstom will refocus on transport, in which it considers itself a ‘global leader’.
The board of Alstom has set up a committee of independent directors, led by Jean-Martin Folz, to review before the end of May the proposed transaction, taking into consideration all stakeholders interests including the French State.
If the board goes for the deal, trade unions will consulted before a binding agreement to sell is concluded.
The offer is binding, meaning Alstom cannot go and solicit offers, although it is entitled to listen to unsolicited ones. If it turns down GE, it will have to pay 1.5% of the purchase price as a penalty.
Siemens has already made a declaration of interest.
Patrick Kron, chairman and CEO of Alstom, said: “The combination of the very complementary Energy businesses of Alstom and GE would create a more competitive entity to better service customer needs.
“Alstom’s employees would join a well-known, major global player, with the means to invest in people and technology to support worldwide energy customers over the long term.
“The proposed transaction would allow Alstom to develop its Transport business as a standalone company, with a strong balance sheet to capitalise on opportunities in the dynamic rail transport market.”