Alstom board accepts General Electric offer

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American conglomerate General Electric has completed a multi-billion dollar deal that gives the company significant shares in Alstom’s power and grid businesses.

The deal, approved unanimously by Alstom’s Board of Directors earlier this week, included a GE (NYSE: GE) offer of US$13.5 billion enterprise value and $3.4 billion of net cash. The company said the all-cash transaction is valued at 7.9 pro forma earnings before interest, taxes, depreciation and amortization (EBITDA) of Alstom’s renewable, thermal and grid units.

Terms of the deal will see GE assume 50% control of Alstom’s grid and renewables businesses, which includes hydroelectric power.

GE will also create a 50/50 alliance for Alstom’s (LSE: ALO) global nuclear and French steam units.

“We look forward to working with the Alstom team to make a globally competitive power and grid enterprise,” GE chairman and CEO Jeff Immelt said. “We also look forward to working with the French government, employees and shareholders of Alstom. As we have said, this if good for France, GE and Alstom.”

In addition to the three joint ventures, the deal includes a memorandum of understanding that would see GE sell its signaling business to Alstom for about $825 million, and for multiple collaboration agreements involving services, technology, supply chain, manufacturing and commercial support in the United States.

GE said the transaction will no proceed with Works Council consultation, customary regulatory approvals and Alstom shareholder approval. The deal is expected to close in 2015. reported earlier this month that Mitsubishi Heavy Industries, Ltd. and Siemens AG had announced a joint deal to acquire a number of Alstom assets, prompting a revised offer from General Electric later that week.

Alstom’s hydropower branch had a strong performance through Fiscal Year 2013/14, posting a 40% increase in orders over the previous fiscal year.

Alstom is one of France’s largest private sector employers, with 18,000 staff. The company reportedly has a market value of about $11.5 billion.

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Michael Harris formerly was Editor for

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