PARIS (Reuters) - The French government would not block a takeover of power and transport company Alstom if the state retained control over its nuclear activities, considered a strategic asset, Economy Minister Arnaud Montebourg said on Wednesday.
Montebourg this week waded into talks of a takeover of Alstom by U.S. group General Electric, threatening to block the bid for what he called a ‘strategic’ company if the buyer failed to provide guarantees on its long-term viability.
France introduced a decree in 2005 allowing the state to block the takeover of any asset deemed a “strategic interest” ranging from defense and security to biotechnology, after a failed attempt by Pepsi to purchase France’s Danone.
On Tuesday, GE Chief Executive Jeffrey Immelt wrote to President Francois Hollande offering guarantees on governance and saying that GE would “work with the (French) state... to protect the (nuclear) sector and safeguard its exports”.
“They are ready to ringfence the turbines used by the (Alstom’s) nuclear industry to preserve its specific nature, so we could not invoke that decree to block the whole takeover,” Montebourg told parliament economic affairs committee.
Montebourg said the state had now inserted itself into the talks, obtaining an additional month during which to examine GE’s offer as well as a competing one from Germany’s Siemens , having been taken off guard by news of the bid.
The outspoken minister, initially cool toward GE’s bid, showed more openness to its offer but also said that working with a German company would give France more power to negotiate to keep jobs in France and stop factory closures.
“The case is by no means shut,” he added.
Reporting By Nicholas Vinocur and Jean-Michel Belot; Editing by Brian Love