(Adds comment from French minister)
May 22 General Electric Co has agreed to
extend its $16.9 billion bid for the power arm of France's
Alstom until June 23 from June 2 at the request of
the French government, the U.S. company said on Thursday.
GE said it agreed to the extension to facilitate discussions
with the government. GE has encountered resistance from the
French government, which has sought to encourage Germany's
Siemens as a potential rival bidder.
"We view this extension positively," GE said in a statement.
French Industry Minister Arnaud Montebourg in a separate
statement welcomed GE's decision to extend the deadline, saying
it was in all parties' interests to find a solution before June
Alstom also said it welcomed "GE's initiative to extend the
period review of the offer by Alstom's board in order to allow
the constructive dialogue with the French state to continue."
GE Chief Executive Jeff Immelt told an investor conference
on Wednesday that the company was still going to "work
constructively" with the French government on its bid and that
he expects the deal to close.
"We wouldn't have started if we didn't think we could
finish," Immelt said at the conference.
A source familiar with the talks said Immelt was aware that
an extension was likely when he made his comments on Wednesday.
GE last month made its offer for Alstom's power turbine and
grid arm in a deal designed to expand its installed base of
power turbines, get a more complete offering to power customers
and broaden GE's presence in emerging markets.
Montebourg said earlier on Thursday that the government was
studying an all-French solution for Alstom that could involve
"Plan A is GE, plan B is Siemens, plan C is a home-based
solution," Montebourg said.
Under pressure from the French government, Alstom has also
opened its books to Siemens, which has dangled its rail business
as part of a possible asset swap. Siemens has asked Alstom for
more information ahead of any offer for the power business.
(Reporting by Lewis Krauskopf in New York, additional reporting
by Maya Nikolaeva and Michel Rose in Paris; Editing by Chris
Reese and Cynthia Osterman)