GE in talks to buy Alstom SA for $13 bn

General Electric Co (GE) is in talks to buy French power equipment and rail infrastructure giant Alstom SA for about $13 billion, Bloomberg yesterday reported, citing people with knowledge of the matter.

GE, which aims to generate 70 per cent of its earnings from industrial businesses, may announce the deal as early as next week, the report cited the people as saying.

The deal has the backing of French conglomerate Bouygues SA, which holds around 29 per cent stake in Alstom, the report added.

A successful deal would give GE control over Alstom's high-speed TGV trains and rail-signal technology.

Alstom, whose stock price has slumped 20 per cent over the past year, has a market capitalisation of about $10.37 billion.

Alstom has recently been hit hard due to low demand for its new thermal power plants. The Paris-based company last year announced 1,300 job cuts last year in order to reduce costs by as much as €1.5 billion by April 2016 and plans to sell assets worth €3 billion to raise cash.

Early this month it struck a deal to sell its heat exchange unit to German private equity firm Triton for €730 million.  (See: Alstom to sell heat exchange unit to German PE firm Triton for $1.01 bn)

It also plans to sell a minority stake in its transport unit, which makes high-speed TGV trains.

It is also under a US investigation over alleged bribery in 11 power projects in Indonesia, China and India. Alstom has a joint venture with Bharat Heavy Electricals Ltd in India.