Shares in French train and power plant constructor Alstom soared on Thursday following a report that US conglomerate General Electric is in talks to buy the group for more than $13 billion.
Bloomberg financial newswire reported that a deal between GE and the maker of France’s high-speed TGV trains on what would be GE’s biggest ever acquisition could be announced “as early as next week.” The $13 billion sum cited by a source close to the talks, would be more than 25 per cent Alstom’s current market value, Bloomberg noted.
The report triggered a scramble for Alstom shares, which had gained nearly 14 per cent to 27.72 euros a share by midday in Paris, far outpacing other leading French stocks.
GE refused to comment on the rumours.
Alstom said in a statement it was “not informed of any potential public tender offer for the shares of the company” and that it “constantly reviews the strategic options of its businesses.” The reported deal would put GE, whose myriad industrial activities include making jet engines and locomotives, in control of one of the jewels of French industry. CEO Jeffrey Immelt has been on a drive to increase the company’s focus on manufacturing and reduce its dependence on the GE Capital finance unit.
Bloomberg reported that he had the support of French building and telecoms conglomerate Bouygues, which has a 29 per cent stake in Alstom. Bouygues was not immediately available for comment.