Alstom's Board of Directors has confirmed that it has received a binding offer from General Electric (GE) to acquire its Energy activities, including its hydropower business.
Alstom’s Board of Directors has confirmed that it has received a binding offer from General Electric (GE) to acquire its Energy activities, including its hydropower business.
The scope of the transaction includes the Thermal Power, Renewable Power and Grid Sectors, as well as corporate and shared services. GE and Alstom Energy have complementary offerings in Power and in Grid, but Alstom is a prominent global player in hydropower, while GE currently has no dedicated service in the industry.
With 65,000 employees, these businesses registered €14.8Bn in sales in fiscal year 2012/13. The proposed price is a fixed price representing an Equity Value of €12.35 billion.
Alstom’s Board said it acknowledged unanimously the strategic and industrial merits of this offer and having noted the publicly announced undertakings by GE, has decided to set up a committee of independent directors, led by Jean-Martin Folz, to review before the end of May the proposed transaction, taking into consideration all stakeholders interests including the French State. Patrick Kron, Chairman and CEO of Alstom, and the committee will liaise with the representatives of the French State to consider their views.
"The combination of the very complementary Energy businesses of Alstom and GE would create a more competitive entity to better service customer needs," commented Kron. "Alstom’s employees would join a well-known, major global player, with the means to invest in people and technology to support worldwide energy customers over the long term. The proposed transaction would allow Alstom to develop its Transport business as a standalone company, with a strong balance sheet to capitalise on opportunities in the dynamic rail transport market."
The Board also reviewed a declaration of interest received from Siemens, and said that Siemens will have a fair access to information needed to make a binding offer.
If an acquisition goes ahead, Alstom said it would refocus on its Transport activities.