French industrial group Alstom has accepted General Electric's €12.4bn (£10.2bn) offer to buy its energy division despite a government outcry over the deal.
Alstom made a concession to ministerial pressure, however, as it said it was still prepared to consider a counter-bid from German company Siemens. In the meantime, an independent committee will scrutinise the preferred bid from the US conglomerate and will report back at the end of next month.
In a four-page letter sent to French president François Hollande, who has shrugged off accusations of meddling in a private company to intervene in the sale process, GE expressed its wish to create "a world leader in energy in France". Alstom is a a leading manufacturer of steam turbines for the nuclear industry and also makes technology for electricity grids.
GE already employs 11,000 workers in different sectors in France who generate 5.3% of the American company's $146bn (£86.4bn) annual turnover.
Alstom said that while a committee examines the GE bid it would consider any concrete offer from Siemens or other "non solicited offers" for all or part of its energy division. Under the terms of the GE bid, Alstom will retain its transport division, which makes France's TGV train fleet, while Siemens is proposing an asset swap that would see Alstom exchange its energy assets for the German group's urban transport arm. Patrick Kron, Alstom's chief executive, said in a statement: "The combination of the very complementary energy businesses of Alstom and GE would create a more competitive entity that would better service the needs of customers."
At a press conference on Wednesday, he said he would not "comment or communicate on whatever offer Siemens might make that we don't (yet) have". While Siemens will be given "fair access to information needed to make a binding offer, should it decide to do so", Alstom has agreed to pay GE a penalty fee of 1.5% of its bid if it does not go ahead with the sale.
The month-long review will act as a sop to France's Socialist government that wants to keep American hands off what it has described as one of its "industrial jewels". Economy minister Arnaud Montebourg, who has encouraged the Siemens bid, has attacked Kron in increasingly vitriolic terms, firstly claiming he had "breached national ethics" by entering into talks with GE "behind the government's back", then accusing him of lying.
In an interview with Le Monde, Kron categorically denied Montebourg's claims.
"I'm not going to get into a row, but I reject this accusation. In my view all this exaggeration is irrelevant. I'm an industrialist, I talk as someone responsible and I want to talk about Alstom. If the management committee wanted to criticise me they could have done so and everyone would have drawn their own conclusions."
Kron added: "Alstom is not on fire. The company's short term future is not at risk and we continue to make money. The issue is how to look forward to the future, to overcome the strategic challenges that await the company.
"A decade ago the company was on its last legs. I battled with all my strength to save it and it was a question of life or death. We had to cut the workforce by half. I do not ever want the group to find itself in that kind of situation again."
However, Montebourg refused to give up, insisting Alstom's fate was far from sealed. "We want alliances, not absorptions", he said, indicating that the government was looking at whether to inject state capital into the business at the behest of the unions.
However, Alstom believes it needs a partner in the energy business. Considered by many analysts too small to survive alone in the energy sector, Alstom said a GE deal would allow it to re-focus on transport including making TGV high-speed trains.
"Alstom would use the sale proceeds to strengthen its transport business and give it the means of an ambitious development, pay down its debt and return cash to its shareholders," the group said in a statement.
