General Electric Co. managed to overcome the last obstacle for the acquisition of the energy business of the French Alstom SA, which is valued at 17 billion dollars. General Electric Co. is to finalize the largest takeover in its history so far.
As reported by the Wall Street Journal, the French Economy Minister Mr. Montebourg said: “We reached an agreement with Bouygues.” His statement was also cited by the Financial Times: “It is a victory for Alstom, a success for France and undeniably a political success for the return in force of the state in the economy.”
The way to the U.S. Company was cleared thanks to the steps taken by the French government and the countrys Economy Minister Arnaud Montebourg after Bouygues SA agreed to sell a stake to the French country. According to an official statement made by Bouygues, it reached an agreement of selling a stake of as much as 20% of Alstom to the French government, which has been one of the major requirements implemented by the local authorities to support the deal. The takeover bid of General Electric Co. was already approved by Alstom.
That is how General Electric Co. managed to close the bidding war with Siemens AG, thanks to the efforts of its Chief Executive Officer Mr. Jeffrey Immelt. The U.S. company is to acquire the gas turbine operations of Alstom and intends to create joint ventures in the renewable energy, electrical-transmission and steam turbine unit. At the same time, Alstom takes control of the rail-signaling business of General Electric for 602 million euros (825 million dollars).
The time of the acquisition is crucial because Alstom said it intends to return some of the cash payment collected from the deal to its investors, pay down some debt and invest up to 2.5 billion euros in the newly-formed joint ventures with GE.
General Electric Co. was 0.15% up to close at 26.97 dollars per share yesterday, marking a one-year change of +15.45%. According to the information published on CNN Money, the 10 analysts offering 12-month price forecasts for General Electric Co have a median target of 28.00, with a high estimate of 32.00 and a low estimate of 27.00. The median estimate represents a +3.82% increase from the last price of 26.97.
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