By Dow Jones Business News,
May 22, 2014, 05:20:00 PM EDT
By Ted Mann and Jan Hromadko
General Electric Co. extended a deadline to complete its proposed $17 billion purchase of Alstom SA's energy assets
by three weeks, bowing to concerns from French officials about the takeover and potentially giving German rival Siemens
AG more room to make its own bid.
GE agreed to prolong the consideration of its offer by Alstom's board, which has already endorsed but not approved
the bid, to June 23. The extension comes at the request of the French government, GE said.
French Economy Minister Arnaud Montebourg has protested the GE bid, saying it was "unacceptable" and a threat to
France's economic sovereignty. Mr. Montebourg has encouraged Siemens to make its own offer for Alstom's businesses,
which also include a rail division that manufactures the iconic TGV high-speed train.
GE said it was extending the deadline to "facilitate ongoing discussions with the government" about its concerns.
The U.S. company has already offered assurances to maintain jobs in France and to protect French access to certain
nuclear-power technology if the purchase is approved.
"We view this as a positive development," GE spokeswoman Deirdre Latour said. Alstom welcomed the move and said in
a statement the extension would "allow constructive dialogue with the French state to continue."
Siemens hasn't formally submitted a bid for Alstom, but earlier on Thursday, the company gave the latest hint that
it was leaning toward making an offer as soon as next week.
Over recent days, Siemens' resolve to place a bid has hardened as its examination of Alstom's books comes to an
end, the people familiar with the matter said. Those people said any bid wasn't likely before next week, when Alstom's
board was scheduled to meet to take action on GE's bid on June 2.
In late April, the German company made a preliminary offer for a chunk of Alstom. But since then, analysts and
people close to Siemens have questioned whether Chief Executive Joe Kaeser was serious about the bid or only trying to
disrupt GE's effort.
Siemens' initial proposal involved paying cash of up to EUR11 billion and an asset swap through which it would
unload its struggling train business on the French company, which builds France's TGV trains.
Mr. Montebourg said Tuesday he had asked both companies to improve their offers. The French government has
effectively become a kingmaker in the Alstom takeover, even though it doesn't own a direct stake in the company.
Siemens is prepared to sweeten its offer, partially by including its rail signaling business in the asset swap,
people familiar with the talks said. Siemens has made clear on several occasions in the past few weeks that it wanted to
keep a stake of up to 19% in the rail business it would hive off to Alstom.
GE has heard out similar requests from French officials. GE Chief Executive Jeff Immelt has offered a joint venture
in rail signaling, though a person familiar with the discussions said GE wouldn't consider selling its locomotive
business to the French. It has also offered to entertain French offers for some Alstom energy assets outside the core of
steam and gas turbines, such as offshore wind and hydropower.
GE has taken pains to project confidence about its chances. Mr. Immelt said Thursday he was sure the company could
complete a deal. Mr. Immelt knew when he made that statement that GE would agree to the government's request for more
A bid from Siemens would probably draw out what already looks set to be a protracted courtship for Alstom's assets.
Mr. Montebourg also warned last week that the government may need more time to evaluate how a GE acquisition would
affect issues of national sovereignty.
--Eyk Henning in Frankfurt and Inti Landauro in Paris contributed to this article.
Write to Ted Mann at firstname.lastname@example.org and Jan Hromadko at email@example.com
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