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Mergers & Acquisitions

Alstom denies takeover bid from General Electric

French train maker Alstom has denied it has received an official offer for its shares from US engineering group General Electric. The denial, however, doesn’t silence takeover rumors reported earlier.

Alstom was not informed of any potential public tender offer for its shares from General Electric, the French turbine and high-speed train manufacturer said Thursday.

"The group constantly reviews the strategic options of its businesses,” Alstom said in a statement, adding that an update on its prospects would be given during its annual conference on May 7.

The statement followed a report by Bloomberg news agency late on Wednesday that US industrial giant General Electric (GE) was in talks to buy the French company.

The deal would cost GE an estimated $13 billion (9.4 billion euros), Bloomberg said, and would bring the US conglomerate urgently needed rail-signaling technology as well as Alstom's TGV high-speed trains. In March, GE lost a public tender to build high-speed train services in five US states to German rival Siemens.

Bloomberg also said that a takeover bid would be backed by French builder and telecoms group Bouygues. The company is a major Alstom shareholder after it took over a 21 percent stake in 2006 that the French government had acquired to rescue Alstom from near bankruptcy a decade ago.

GE Chief Executive Jeff Immelt said last week he was targeting acquisitions of up to $4 billion to boost the company's industry businesses, while reducing GE exposure to its financial activities.

Alstom is struggling to make a profit because it is hard hit by a drop in orders for its power equipment amid weak demand in Europe and slumping electricity prices.

As a result of the merger talks, shares in Alstom jumped 16 percent in early trading at the Paris Stock Exchange on Thursday.

uhe/hc (Reuters, dpa, AFP)

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