Alstom-GE Deal Approval: Shareholders, Merger Control

Alstom-GE deal approval: Shareholders backed the transaction by 99.187 percent, with 64.25 percent quorum; merger control, regulatory clearance, and foreign investment reviews remain, alongside joint ventures, share buy-back, and Q2 2015 closing.

Inside the Issue

Alstom shareholders approved the GE deal by 99.187 percent; closing awaits merger control and regulatory approvals.

64.25 percent quorum at shareholders' meeting
Resolution passed with 99.187 percent majority
Limited adjustments; no material impact cited
Closing targeted for Q2 2015, pending approvals
Cash return €3.5-€4 billion via share buy-back

Alstom’s Extraordinary Shareholders’ Meeting, convened on 19 December 2014, approved the transaction to sell Alstom’s Energy businesses to General Electric.

This meeting gathered shareholders holding 64.25 percent of the total number of shares and voting rights. The resolution relating to this transaction was approved by a majority of 99.187 percent.

During the Shareholders’ Meeting, Patrick Kron, Chairman and CEO, reported on the project’s progress with General Electric, including its plan to double energy efficiency investment in coming years.

In particular, he indicated that the Board had taken note of a limited number of recent positive and negative adjustments regarding the terms of the transaction, and of portfolio moves such as GE's consumer unit spin-off that frame the backdrop. The combination of these adjustments should not have a material impact on the transaction.

Following the information-consultation procedure with works councils and the authorisation relating to foreign investments in France, the support expressed by shareholders is a key milestone since the signing of the agreements with General Electric, amid an 80 percent profit surge at GE, in November 2014.

The transaction remains subject to the authorisations required from a regulatory and merger control standpoint in a number of jurisdictions. Subject to that condition, the closing of the transaction is expected, in line with GE's acquisition of Alstom's power and grid businesses timeline, in the second quarter of 2015. It will be accompanied by the reinvestment by Alstom of part of the proceeds into joint ventures to be formed with General Electric, as it taps into a natural gas deal across its energy portfolio, and will be followed by a cash return to shareholders, which could range between €3.5 billion and €4 billion, and be implemented through a public share buy-back offer. Such offer would be submitted to a shareholders’ decision after completion of the transaction.