French government hails Alstom victory

French government defends intervention in battle for Alstom after securing crucial stake

The French government has claimed victory in the battle for Alstom after forcing American giant General Electric to revise the terms of its takeover bid.

France approved the deal after securing a 20 per cent stake from Paris-based shareholder Bouygues, putting an end to months of arduous negotiations between the board and a group of potential suitors, including GE as well as rivals Siemens and JMitsubishi Heavy Industries.

Under the new terms, the American giant will enter three joint venture with the French company, including its power grid, renewable and nuclear turbines businesses. France will also be able to impose penalties on GE if it fails to make good on its promise to create 1,000 jobs.

Chief executive Patrick Kron said the deal "is a combination of Alstom’s qualities and GE’s economic strength". His remarks were echoed by French economy minister Arnaud Montebourg, who hailed the new deal as an "alliance" rather than a straight buyout.

"This is a way of organising ourselves in the face of globalisation. It builds alliances rather than allowing France to become a giant shopping centre for foreign corporations to come and prey on our companies," he added.

Meanwhile prime minister Manuel Valls insisted that Alstom would be "in the hands" of a foreign company if France's socialist government hadn't stepped in and rejected GE's initial bid back in April.