French power equipment maker Alstom has approved USD 17 billion offer made by General Electric to acquire its global power business after deliberating on two more such proposals made by Siemens and Mitsubishi.
The Board of Directors of Alstom received, on June 20, an update to the offer from General Electric (GE) to acquire the power and grid businesses of Alstom. It also received a revised proposal from Siemens and Mitsubishi Heavy Industries.
"Based on the works of the committee and financial and legal advisors, the Board of Directors has unanimously decided to issue a positive recommendation of the offer from GE," Alstom said in a statement.
Alstom received a binding offer from GE to acquire its energy activities. The proposed price is a fixed one representing an equity value of euro 12.35 billion or USD 17 billion.
The scope of the proposed GE transaction includes the thermal power, renewable power and grid sectors, as well as corporate and shared services. Proceeds from the sale will be used mainly to expand Alstom's transport business.
Under the terms of the updated offer, following completion of the Energy Transaction, Alstom and GE would establish joint ventures in Grid and Renewable Power, the company statement said.
"In Grid, each company would hold a 50 per cent stake in a global business combining Alstom Grid and GE Digital Energy.
In Renewables, each company would hold a 50 per cent stake in Alstom's off-shore wind and hydro businesses," it added.
Meanwhile, the French government, on Sunday, said that it will buy 20 per cent stake in Alstom from construction giant Bouygues SA.
The government's move is aimed at ensuring its say in jobs and decision-making of the company that builds power plants and France's high-speed TGV trains.