LONDON – General Electric Co. CEO Jeffrey Immelt may be moving closer to pulling off his largest-ever acquisition, even after French officials over the weekend urged Alstom SA to consider a rival offer from Germany’s Siemens AG.
The government doesn’t oppose GE’s proposal, and a meeting in Paris on Monday between Immelt and President Francois Hollande focused on protecting jobs and maintaining the independence of France’s nuclear industry, according to a person with knowledge of the discussions. The state doesn’t favor either bid, the person said, asking not to be named as the talks weren’t public.
Industry Minister Arnaud Montebourg on Sunday expressed his support for a deal with Siemens, which would entail swapping some of its rail assets for Alstom’s energy division and creating two “European champions.”
Both GE and Siemens have taken steps to appease policy makers for a deal with Alstom, which has a market value of about 8.3 billion euros ($11.5 billion) and is also the company supplying turbines for Deepwater Wind LLC’s 30-megawatt Block Island Wind Farm project.
GE is arguing that its plan, to acquire the energy business while Alstom’s transport unit is separated, would result in fewer job losses thanks to smaller overlaps of operations, said people with knowledge of the matter. Siemens is willing to make guarantees about jobs and executive positions, one person said.
“None of these big players buying Alstom is going to be a smooth ride,” said Simon Toennessen, an analyst at Credit Suisse Group AG. “Siemens is seeing the competitive threat from GE as big enough to consider this step.”
Hollande will also meet Siemens CEO Joe Kaeser and Chairman Gerhard Cromme Monday, according to another person familiar with the matter.
The board of Alstom, which is based on the outskirts of Paris, met Sunday to examine the approaches, and so far prefers GE’s proposal - which is a binding offer, compared to Siemens’s more informal expression of interest, the people said. However, it is also considering Siemens’s offer out of deference to the government’s wishes, they said.