General Electric of the US and Siemens of Germany yesterday launched charm offensives to win France's socialist government over to their competing bids for engineering group and "industrial jewel" Alstom, each arguing that its offer best served the national interest.
Jeff Immelt, chief executive of GE, and Joe Kaeser, his Siemens counterpart, met president François Hollande at the Elysée Palace after Paris threatened to block any deal it considered unsuitable.
National debate
The GE approach sparked national debate last week over France's declining industrial power and spurred politicians to seek alternatives, though the state no longer has a stake in Alstom. Industry minister Arnaud Montebourg appeared to favour Siemens yesterday evening. He said its proposal to swap rail for power assets would create "two European and global champions". This deal would be easier to sell politically than the proposed US offer and Berlin weighed in to it. But the GE deal is widely seen to make more industrial sense and could result in fewer job losses.
The Alstom board favours GE, said people close to the talks, but is considering its options. There was speculation that the government could still bring in a French bidder. Siemens’ board is set to meet and a bid could come as early as today. General Electric’s bid to take over the bulk of engineering group Alstom has presented France’s socialist president with a tough new test.
The move is the latest cross- border corporate deal to challenge French ambivalence towards globalisation. In recent months, the government has largely stood by as Publicis, the advertising group, and then cement maker Lafarge, entered mergers that were in effect takeovers by foreign rivals – respectively Omnicom of the US and the Swiss group Holcim.
But when it comes to symbols of France's industrial core, a deep-seated, cross-party protectionist instinct kicks in that dates back to Jean-Baptiste Colbert, the 17th-century finance minister to Louis XIV and father of French dirigisme.
Energy business
Nobody embodies this more than Mr Montebourg, who proclaims himself a champion of "Colbertism 2.0". Despite the state holding no stake in Alstom, he lost no time in weighing into the GE bid, writing to Mr Immelt, objecting to a deal that would see the US company swallowing Alstom's strategic energy business.
Mr Montebourg said yesterday it was unacceptable that a “national jewel” that makes turbines for the energy industry and TGV high-speed trains should be sold “behind the backs of the workers, the government, most of the board and its leading managers” and “steered from Connecticut”.
It was this approach that pushed the government earlier this year to spend €800 million buying a stake in PSA Peugeot Citroën to match an investment by Dongfeng that otherwise threatened to shift the carmaker under Chinese control. – (The Financial Times Limited)
