Could two major makers of trains be on track to merge?
US firm General Electric has reportedly been talking to Alstom, builder of turbines and France’s high speed trains about buying it for $13 billion (9.4 billion euros).
According to Bloomberg, a General Electric bid would have the support of French conglomerate Bouygues, which own 29 percent of Alstom’s shares.
Those shares gained 10.9 percent on Thursday in response to the report. That was a big bounce back considering they have slumped 20 percent over the past year due to concerns about Alstom’s cash flow.
Alstom has been hit hard by economic weakness in Europe and a drop in orders for power equipment. It is currently shedding 1,300 jobs. Its train business has held up better and secured record orders.
Alstom denied the GE rumour, but in a not very convincing way. It said it had not been informed of any potential public tender offer, which could be interpreted as a Watergate style non-denial denial – that responding to a question that had not been asked.
There is also a political element. The big question is – could a takeover by a US company get the approval of the French government and unions?
Pierre Briancon, European Editor of Reuters BreakingViews thinks it would be difficult: “We’ve a government, a new prime minister, who’s trying to engineer the famous, or infamous, supply side shock that François Hollande wants to instill. They’re trying to reform, cutting spending, cutting labour costs, doing overall very business friendly policies. Which is proving to be a hard sell in France.”
Prime Minister Manuel Valls would not comment on the report. He did say that, as with other big French companies, the government would keep a close eye on jobs, technology and decision-making.
The Economy Minister Arnaud Montebourg is known to oppose foreign companies buying French firms.
Montebourg has in the past verbally attacked big business and the European Commission. Last year he intervened to prevent Yahoo from taking over French online video-sharing site Dailymotion from telecoms operator Orange.
Copyright © 2014 euronewsMore about:
- 1Podemos: Spanish indignation in Brussels’ corridors of power | euronews, reporter
- 2Israel announces it will seize 400 acres in West Bank | euronews, world news
- 3Watch: Angry mob throw Ukraine MP into rubbish bin | euronews, world news
- 4Japan sounds bluefin warning, calls for 50% catch cut | euronews, world news
- 5Iraq: Baghdad rally held against US ‘occupiers’ | euronews, world news
- 6Now is ‘right time’ for Catalonia independence vote, says Mas | euronews, world news
- 7New car offers freedom for disabled drivers | euronews, hi-tech
- 83D printing: a driving force in design and engineering | euronews, hi-tech
- 9Rise of the machines | euronews, futuris
- 10Young Yazidi girl escapes Islamic State kidnappers | euronews, world news
- 11Ukraine: Donetsk rebel weapons factory blows up | euronews, world news
- 12Algeria: ISIL offshoot releases video threatening French hostage Hervé Gourdel | euronews, world news
- 13Official ‘executed by flame-thrower’ over links to Kim Jong-un’s purged uncle | euronews, world news
- 14Vatican rocked by another paedophilia scandal | euronews, world news
- 15EU leaders name Donald Tusk European Council president | euronews, world news
- 16British Muslims’ message to ISIL: Not in my name! | euronews, world news
- 17Iceland puts on a show as two of its volcanoes spew out lava | euronews, world news
- 18The business benefits of EU chemical regulation | euronews, business planet
- 19Iceland volcano ‘pollutes Paris’ | euronews, world news
- 20#Indyref Live: Scotland votes on independence from UK | euronews, world news
Wires > Business
- 21:49 CET French state fund sells 1.9 percent Orange stake
- 21:42 CET SEC charges two with insider trading ahead of Pershing-Herbalife…
- 21:29 CET Dollar climb hits commodities, stocks to close quarter lower
- 21:26 CET Pimco CEO says firm to expand equities business – CNBC
- 21:06 CET U.S. confident can find balance with EU on investor rights
- 21:02 CET Pimco CEO says firm to expand equities business – CNBC
- 20:59 CET Portugal sounds out Spanish banks on Novo Banco sale – sources
- 20:54 CET Johnson & Johnson to buy private drug developer for $1.75 billion