A DEAL agreed by Alstom bosses with giant American firm General Electric has been welcomed by Stafford Borough Council leader Mike Heenan.
The deal, which industry analysts say will help scale up Alstom to compete in global markets, could be good news for Stafford, which has a major base in the town, Councillor Heenan said.
“My understanding is that the Alstom board felt the GE bid was a better fit with its existing business,” he said. “We have something in Stafford, in terms of expertise, that GE doesn’t have already in its own operations so hopefully this will mean an end to uncertainty for uncertainty for Stafford employees and turn out to be good news for their future.”
The Alstom board rejected a rival offer from German firm Siemens, and Councillor Heenan said he felt the Siemens deal had never been a serious contender.
“Siemens were dragged into this by France’s President Hollande in an effort to find a European bidder,” he said. “But I believe these kind of deal are best left to the market, and the GE deal made better market sense.”
Alstom has agreed a complex deal which involves an outright purchase of part of its business by GE, plus a series of joint ventures. It still needs approval from shareholders and competition regulators but is expected to come into effect early next year.
GE originally bid to buy Alstom’s power and energy businesses outright, but the deal agreed this week sees a variety of ownership models.
The deal will see GE buy Alstom’s business manufacturing gas turbines for power plants, while Alstom will buy GE’s rail signalling systems division.
Alstom and GE will also create three joint ventures for its nuclear, renewable energy and power grid businesses.
Meanwhile the French government, which originally opposed the GE bid, is to take a 20 per cent stake in Alstom, designed to enable it to protect French interests.