Alstom has chosen unanimously to offer the American General Electric to resume its activities in energy. The government has negotiated the terms of the acquisition of 20% stake in Alstom to Bouygues.
The last obstacle to the resumption of Energy Alstom by the American General Electric (GE) was lifted Sunday afternoon after a weekend of intense negotiations: the state has reached an agreement on the conditions of redemption 20% stake in Alstom, Bouygues, today major shareholder (29.4%) of the French supplier. "It is for the government prior to any form of government approval to the proposed partnership," warned Friday night, the Minister of Economy in a letter to the CEO of the American group, Jeffrey Immelt. Arnaud Montebourg formalized the agreement "20 hours" of France 2 tonight.
Who does not want to sell off its stake included 34 euros per share in its accounts Bouygues, has assured that the state could acquire the 20% over 35 euros for twenty months after the closing of the transaction, in the first half Bouygues 2015. "considers that the title Alstom worth 35 euros. We give him twenty months to prove, "says one at Bercy. Friday, Alstom during closed at 28 euros. In the meantime, the State may acquire securities in the market, and Bouygues him "ready" for free 20% of the voting rights. The State will also be two directors to the board of Alstom. To finance the operation (1.7 billion euros during Friday), the State believes it does not need to sell other investments. Arnaud Montebourg however, said on France 2 tonight that the State proceeded to management "dynamic" of its portfolio, which includes 71 investments worth some € 110 billion. All stakeholders have an interest in reaching an agreement before the opening of trading on Monday morning.
Surprise Friday
The Minister of Economy had a surprise Friday night, announcing the will of the State to carry out a partial nationalization of Alstom and clearly positioning the supply of U.S.. It is however opposed to a competing proposal prompted by the government, from the Japanese Mitsubishi Heavy Industry and German Siemens. To counter the initial offer of GE, which was a simple purchase of the energy branch of the French equipment for an amount of € 12.35 billion, the duo had proposed a complex scheme based on joint ventures and meet government requirements, very attached to a "partnership". A scheme which the American eventually largely inspired, to meet the requirements of the executive. "If we had two offers at the same time, they were worth," says Will in the entourage of the Head of State.
The executive is finally showed pragmatic. Initiated with an edge, negotiations with GE had the merit of having the support of leaders of Alstom and its board of directors. Having obtained that GE brings significant changes to its offer, it can also boast of having shown "patriotic vigilance" and welcome the way the case was handled. "We were very professional on this matter," said Will in the entourage of the Head of State.
Closure next year
Remains in the end, GE resume well a large part of energy activities of Alstom, for a net cash investment of € 7.3 billion. Alstom will hold 50% of certain activities in the energy, which will benefit from synergies and cooperation with GE, but no longer appear in its consolidated financial statements (see also below). "The industrial logic is unchanged. Alstom will rely on a solid group, with real financial clout "says Patrick Kron, CEO of Alstom.
The closing of the transaction will still take many months: given the multiple consultations and perform authorizations required (. Representative bodies, competition authorities, etc.), Alstom provides that the extraordinary general meeting will not be held before the fall, to loop next year. "I will lead through this ambitious, offensive and not defensive project," says Patrick Kron. The CEO, however, should then give his chair, comme il l’a déjà laissé entendre à plusieurs reprises.