General Electric has faced a number of questions over its proposed takeover of most of the French energy giant Alstom.
But one of the least foreseeable has to do with the special relationship that G.E.’s chief executive shares with one of Alstom’s advisers.
As it happens, G.E.’s leader, Jeffrey R. Immelt, is the brother of Stephen J. Immelt, who this summer will become the sole chief executive of Hogan Lovells, an American law firm that is working for Alstom on the transaction.
The ties between the Immelt brothers and how they relate to the French deal were briefly mentioned in The American Lawyer last month. But they took on a bit more prominence in the French press a little later. The French satirical weekly Le Canard Enchaîné mentioned them on May 14. Other French media, including Europe 1 radio, then followed, suggesting a possible conflict of interest.
With the French economy in a rut and unemployment high, Jeffrey Immelt has worked hard to assuage the government’s concerns that Alstom, one of the country’s industrial crown jewels, will simply disappear into the American giant.
But opinion polls have showed that a majority of the country supports Economy Minister Arnaud Montebourg’s tough stance in negotiations with G.E., and the revelation that Mr. Immelt’s brother was also involved in the deal might play into dark fears about an American invasion.
But of all the reasons for the Élysée Palace to reject the deal, this is not one.
A spokeswoman for Alstom, Christine Rahard-Burnat, said in a statement that Alstom had worked with Hogan Lovells for years, long before Stephen Immelt had even joined the firm. Moreover, the legal-minded Immelt – a litigator based in the United States – is not working on the transaction.
“There is no conflict of interest,” she said.
G.E. and Hogan Lovells declined to comment.