General Electric’s 17 billion dollar bid to buy France’s Alstom SA Energy has been blocked by the French government.
Late Wednesday the French Economy Minister touted the move as one worthy of nationalistic pride and economic shrewdness. “This is a decree we should have adopted a long time ago,” he said, “you can’t ask a country to give up on the interests it considers strategic and essential.”
Meanwhile, Michel Barnier, the EU commissioner for internal market services, also a Frenchman, is reviewing the French government’s opposition to see if it is in line with EU rules.
GE responded, “We appreciate the importance of the energy sector to France, and we will continue to have open and productive discussions with the government.” The acquisition would be GE’s biggest ever who hopes to bolster industrial revenues as its finance arm winds down.
The deal sounds dead to me. That’s 17-billion less dollars going Euro (not that the deal was all cash — it wasn’t). But if it still happens, if GE makes the concession that France’s government is looking for that says more about GE’s outlook on its ability to pull in significant profits from its increasingly important industrial arm. Further, since GE is a major player in so many industrial sub-industries, it might serve as an initial warning about turbulence ahead.
