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updated: 6/21/2014 5:41 PM

Alstom board approves GE bid to buy power business

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  • Siemens CEO Joe Kaeser, right, and Mitsubishi CEO Shunichi Miyanaga, arrive Tuesday for their press conference in Paris. The CEOs from Siemens and Mitsubishi Heavy Industries met with the French president to promote their joint offer to buy parts French engineering company Alstom and head off a rival bid from General Electric Co.

      Siemens CEO Joe Kaeser, right, and Mitsubishi CEO Shunichi Miyanaga, arrive Tuesday for their press conference in Paris. The CEOs from Siemens and Mitsubishi Heavy Industries met with the French president to promote their joint offer to buy parts French engineering company Alstom and head off a rival bid from General Electric Co.
    Associated Press

 

PARIS -- The board of Alstom SA has unanimously approved GE's $17 billion offer to buy the French company's power generation business, the companies announced Saturday.

GE says that if shareholders and workers' representatives approve, the deal to buy Alstom's gas and steam turbine-making operations will close sometime next year.

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The move is another step for GE toward its new focus on building and servicing big, complicated industrial equipment such as aircraft engines, power plant turbines and oil and gas drilling equipment. The U.S. company sold its remaining interest in NBC Universal last year as part of the new strategy.

GE has been fighting for months to make the Alstom deal, and on Friday, the French government dropped objections and supported the company's offer. The deal is still subject to the French government buying a 20 percent stake in Alstom, and that deal is expected soon.

French President Francois Hollande said on Saturday that the government expects rapid progress on the talks.

"This is a major condition for the government's acceptance of the alliance," he said.

Also under the deal, GE agreed to sell its railroad signal business to Alstom for about $825 million. The sweetened GE offer also calls for the two companies to set up three 50-50 joint ventures: one for the power grid businesses, another for offshore wind and hydro-power operations, and a third for nuclear steam turbines.

Alstom's statement says the board received revised proposals from Siemens and Mitsubishi Heavy Industries, but decided on the GE bid.

Alstom has favored a tie-up with GE but had to postpone signing any deal while the government intervened to seek assurances on jobs and decision-making.

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