General Electric 'in talks to buy Alstom for $13bn'

General Electric is in talks to buy French train maker Alstom for about $13bn (£7.75bn), according to reports.

GE, the US manufacturer of jet engines, has the backing of Alstom shareholder Bouygues, which owns around 29pc of Alstom, Bloomberg claimed.

The companies could announce a $13bn deal, which would value Alstom at 25pc above its current market capitalisation, as early as next week.

An agreement would give GE control over Alstom’s high-speed TGV trains and rail-signal technology.

In January Alstom, which is also behind some of the technology for several UK power stations including Somerset’s Hinkley Point, warned it will miss its full-year profit target this year.

The company said orders fell 12pc in the first nine months of its financial year due to low demand for its new thermal power plants. As a result it expects to spend more cash than initially forecast.

“In this difficult environment, our focus remains on the implementation and acceleration of the ambitious cost savings initiatives which have been launched,” chairman and chief executive Patrick Kron said in January.

At the end of last year he announced a plan to raise €3bn through the sale of assets, including a minority stake in its transport unit.

The company is also cutting 1,300 jobs.

Alstom has seen its shares drop 20pc in the past 12 months as economic woes in Europe and a slowdown in emerging markets hurt demand.

In contrast, GE posted strong first-quarter results in its core oil and gas division last week as it benefits from the shale fracking revolution in the US.

The company’s petroleum engineering unit saw a 27pc rise in earnings to $446m (£265m), making it the best performing area of its operations, which include everything from white goods to consumer finance.

Jeff Immelt, chief executive, said he is looking to make acquisitions in the range of $1bn to $4bn.

Neither GE nor Alstom could be reached for comment.