General Electric's $17 billion bid for Alstom's energy business is in jeopardy after France gave itself the power to block foreign takeovers in industries it deems strategic.
A decree signed published yesterday by the economy and industry minister grants the French government the right to intervene in areas that include energy.
The decree swiftly drew a warning against “protectionism” from the EU official in charge of competition and was called a “bad idea” by French employers’ group MEDEF.
The move broadens a 2005 law focused primarily on military and defence-related operations, and gives the state much-increased powers to block foreign takeovers in the energy, water, transport, telecoms and health sectors – potentially affecting about a quarter of the companies in France’s CAC-40 blue-chip equities index.
The new rule, which takes effect today, strengthens France’s ability to extract concessions, including improvements in jobs guarantees.
GE, facing a possible competing offer for Alstom from Siemens that's favoured by some French officials, may be forced to raise its bid or abandon it completely. – (Bloomberg)
