GE Considers Selling Train Signal Business to Alstom -- Update

By Dow Jones Business News, 
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By David Gauthier-Villars and Ted Mann

General Electric Co. is considering selling its train signaling business to Alstom SA in a bid to improve the appeal of its $17 billion offer for the French engineering firm's energy business and counter German and Japanese suitors, according to people direct knowledge of the matter.

Selling the signaling operations would help meet a demand expressed by France's President François Hollande that the U.S. conglomerate help beef up Alstom's train business in exchange for blessing GE's purchase of the iconic French engineering company, the people said.

The two companies have held talks and agreed on a tentative value for GE's signaling unit, they said. The people declined to elaborate on the potential value, saying only that GE's business was slightly smaller than Alstom's but more profitable.

With a direct sale, GE would go beyond its initial proposal, which Chief Executive Jeffrey Immelt outlined during a parliamentary hearing in France last month, to consider pooling its signaling operations with those of Alstom into a joint venture.

Write to David Gauthier-Villars at David.Gauthier-Villars@wsj.com and Ted Mann at ted.mann@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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