Alstom has officially accepted GE’s $17 billion offer for the French company’s energy business, but a frazzled French government would much prefer Germany’s Siemens to be on the buying end. French politicians were in a less-than happy state upon the news that Alstom had agreed to the GE offer, although according to GE’s Immelt, the deal is not yet totally finalized and material changes can still be made before it becomes finalized.
The official acceptance by Alstom however was enough to stir politicians to a point of unease, as French leaders seem keen on keeping their energy sector in European hands. The war for Alstom, taking place between the US-based GE and Germany’s Siemens has now officially seen some serious action. The latest move points quite clearly to the intentions of Alstom in its desire to make a deal with GE, although Siemens has yet to submit a counter-offer which it says will be made shortly.
The deal is just the latest demonstration that corporate globalization is barreling onward at a dizzying pace, as if it were not already happening fast enough. The French government however is not so thrilled at the news that one of its most prized businesses could fall into “US-hands.” Alstom, for its part has reserved the right to consider and take unsolicited offers even though it has formally accepted the GE offer, thus leaving the door open for the bidding wars to continue. Siemens will obviously be taking a few shots at getting in on the action, but another interesting party to join in the bidding games may be the French government itself.
French Economy Minister Arnaud Montebourg has made it clear that the “fight” is not over just yet, despite however solid the current GE-Alstom deal may look to be. Montebourg pointed to the fact that there is still some time before the deal in question becomes completely official, and he stated that he and the French government intend to use that space of time to do what it can in protecting France’s domestic industrial interests. Considering that French Prime Minister Manual Valls took a markedly different tone regarding the entire deal, just what exactly Montebourg can or will do has yet to be seen, however his seriousness regarding the situation was clear.
Prime Minister Valls, in speaking of the Alstom-GE deal, sounded more as if the interests of the French Government would be considered in the deal and from his perspective it appeared as a much less dire situation for French interests. Nearly three-fourths of Alstom’s business is currently centered around energy, thus making the potential partial sale of one of France’s largest domestic employers a matter of serious domestic concern. Alstom, although it employs tens of thousands in France, and is heavily focused in the energy sector, is surprisingly better known as a railway equipment manufacturer for high-speed trains.
In speaking of the French governments role in the whole deal, Alstom attempted to reassure the French government and people that domestic interests would be considered and that the government could still have a say before the deal was finalized. Finance Minister Montebourg, along with some others however are clearly concerned that French interests may be compromised. The deal highlights the same old issues plaguing domestic businesses around the globe which, as globalization barrels onward, are finding it harder and harder to remain competitive.
At present, making waves through France is news that Alstom has officially accepted GE’s offer, however a frazzled French government has yet to weight in on the future of the deal. With offers still being accepted by Alstom, it will be interesting to see how Siemens and the French government proceed regarding Alstom’s desire to sell its energy business.
By Daniel Worku