France meddles in Alstom deal

America’s General Electric (GE) has made a $13.5bn bid for the energy business of France’s Alstom, which also specialises in transport.

Alstom, which built France’s power grid and makes its TGV high-speed trains, says it will review the offer and decide whether to enter exclusive negotiations with GE by June. That leaves the door open for a counter-offer by Germany’s Siemens.

The French government has waded into the affair, with the economy minister Arnaud Montebourg openly agitating for a tie-up with Siemens. Alstom was bailed out by the French state in 2004 and has remained mired in debt.

What the commentators said

Here we go again, said Hugh Carnegy in the FT. “When it comes to symbols of France’s industrial core, a deep-seated, cross-party protectionist instinct kicks in.” The government’s eagerness to prevent Alstom falling into US hands goes beyond the instinctive distrust of Anglo-Saxon capitalism.

As The Daily Telegraph pointed out, President François Hollande’s predecessor Nicolas Sarkozy trumpeted his rescue of the near-bankrupt Alstom in 2004, while he was economy minister – thus ironically ensuring that it did not fall into the hands of Siemens.

Socialist Hollande “would be left red-faced” if a national champion saved by his arch-rival falls under American control. Never mind, of course, said The Wall Street Journal, that the GE deal would do far more to shore up activity and jobs in France, as there would be less overlap than in the Franco-German combination.

When will the French learn to butt out of business, wondered Allister Heath in City AM. Shareholders and executives may make plenty of mistakes, but “they make fewer than politicians”.

Merryn

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