The board of the French engineering group Alstom has accepted a $12bn offer (8.6bn euros) for its energy arm from General Electric (GE).
Alstom is also a key supplier of TGV high-speed trains and makes turbines for electricity generation, including for France’s nuclear industry.
The offer by the US firm puts it ahead in the battle with German rival Siemens which could well make a counterbid.
Unions and the French government have been concerned about the breakup of the company which employs 18,000 people nationally and is seen as a strategic industrial asset.
However it has been carrying heavy debts and suffered from a fall in orders over the past decade. It had to be bailed out by the French government in 2004.