France boosts say on GE-Alstom deal with takeover law

PARIS: The French government has issued a decree allowing it to block foreign takeovers of French firms in “strategic” sectors, throwing up a potential roadblock to General Electric’s (GE) US$16.9bil bid for Alstom’s energy assets.

The decree, extending an existing 2005 law relating to the defence and other industries, was published in the official state gazette yesterday and gives the state much-increased powers to block foreign takeovers in the energy, water, transport, telecoms and health sectors.

Any such acquisition would now need the approval of the Economy Minister, the decree published in France’s Official Journal said.

The current minister, Arnaud Montebourg, has openly criticised the proposed Alstom-GE deal for fear of the impact on French jobs and prestige, and has instead advocated a European tieup with Germany’s Siemens.

“With this new law, the risk that GE will reconsider its position increases, since additional concessions on a GE-Alstom deal will be sought by the French government to gain broader electorate support,” Berenberg analysts said in a research note, adding it opened the door for an alternative deal with Siemens. – Reuters

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