Alstom has accepted a bid from GE for its power and grid businesses.
The French conglomerate’s board of directors has preferred the American suitor over Siemens and Mitsubishi Heavy Industries (MHI) who submitted a updated rival bid last week.
Under the agreement, GE will acquire Alstom’s Thermal Power, Renewable Power and Grid Sectors for €12.35 billion, as had already been announced. However, rather than a straightforward acquisition, GE and Alstom will form three new joint ventures.
The new bid will also see the French government take a 20 per cent stake in Alstom in a move designed to protect domestic jobs.
GE will also transfer its €602 million signalling business over to Alstom and sign a number of collaboration agreements for the maintenance of GE locomotives outside of the United States.
Alstom has said it will now “refocus” its rail interests, with some of the proceeds from the transaction set to strengthen its transport business.
Patrick Kron, chairman and chief executive of Alstom, said: “Alstom Transport, a solid leader with a large portfolio of technologies and a worldwide presence in a dynamic market, would be further strengthened through the acquisition of GE’s signaling business as well as a far-reaching rail alliance with GE.”
GE chairman and chief executive Jeff Immelt said: “We will now move to the next phase of the Alstom alliance. We look forward to working with the Alstom team to make a globally competitive power and grid enterprise. We also look forward to working with the French government, employees and shareholders of Alstom. As we have said, this is good for France, GE and Alstom.
“For GE, the overall economics of the deal remain intact,” Immelt said. “This transaction remains accretive in year one.”
The deal is expected to be completed next year.