Alstom: France gets new takeover veto rights

Alstom workers Image copyright AFP
Image caption Alstom has said it will decide by the end of May which bidder it prefers

French Prime Minister Manuel Valls has signed a decree giving the government new powers to block foreign takeover bids for companies deemed "strategic".

The move comes as US firm General Electric (GE) and Germany's Siemens vie to take control of French engineering group Alstom's power business.

Any such takeover will now need approval from Economy Minister Arnaud Montebourg.

Mr Montebourg is known to favour the Siemens approach over the GE bid.

In a statement, he said the government's new powers of veto would be "applied in a selective and proportional manner, taking each situation into consideration".

Until now, the French government's power to intervene was confined to deals concerning defence and security matters. The decree extends this to the energy, water, transport, health and communications sectors.

Power play

Last week, Alstom reported a 28% drop in full-year net profit to 556m euros ($774m; £456m).

The company blamed the fall on restructuring costs, asset writedowns and tough economic conditions.

Alstom is currently considering a $16.9bn offer from GE for its energy business, but Siemens has also shown interest in the unit.

The French firm has said it will decide by the end of May which bidder it prefers.

The power business accounts for about 70% of Alstom's total revenue, and if a deal went through, it would leave the company as a transport business. Alstom's transport unit makes TGV high-speed trains and signalling equipment.

Both GE and Siemens have already met French President Francois Hollande to discuss their potential offers.

The French government has opposed GE's offer.

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