Alstom India Jumps 4% as Board Recommends GE Offer

The board of directors of Alstom has unanimously accepted GE's offer to acquire Alstom's thermal power, renewal power and grid sectors as well as corporate and shared services for an equity value of 12.35 billion euro and an enterprise value of 11.4 billion euro.

Under the terms of the new offer, Alstom and GE would establish joint venture in grid and renewable power. 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.

Should this offer be approved by shareholders and completed, Alstom would refocus on its fully owned transport activities and on its energy alliances with GE. Alstom would use the proceeds of this transaction to strengthen its transport business, to invest in its energy alliances, to pay down its debt and return some cash to its shareholders.

Completion of the GE transaction will be subject to works council consultation and merger control and other regulatory clearances, including French Foreign Investment authorisation. In accordance with the AFEP-Medef code, the final approval of the transaction will be submitted to the shareholders.

As of 9.55 a.m. shares in Alstom India traded 3.34 per cent higher at Rs 568.4 whereas shares in Alstom T&D India traded 0.57 per cent higher on Monday.