France Clears Way for GE-Alstom Deal
Government to Buy Stake in French Industrial Firm From Bouygues
PARIS—The French government has reached an agreement to purchase a stake in Alstom from its leading shareholder, Economy Minister Arnaud Montebourg said Sunday, clearing the way for General Electric Co. GE +0.15% to complete its acquisition of most of the French industrial company.
The accord—hashed out in marathon talks between the government and French conglomerate Bouygues grants the government an option to buy a 20% stake in Alstom from Bouygues at a future date, Mr. Montebourg said.
"We reached an agreement with Bouygues," Mr. Montebourg said.
Bouygues, whose businesses range from construction to telecommunications, confirmed the agreement in a statement, adding that the government's option to purchase the Alstom shares will last for 20 months and begin after the GE-Alstom deal closes.
Mr. Montebourg added that Paris would move to purchase the stake when Alstom shares are trading at their "lowest" levels on the stock market. The government's decision to buy the stake at a future date marks a concession. The government vowed Friday evening to buy the stake before GE closed the deal with Alstom, but Bouygues balked at that proposal.