GE, the US engineering conglomerate, has cleared the final hurdles in its €12.35bn (£9.9bn) revised bid for Alstom after it settled terms set by the French government.
President Francois Hollande insisted that the state should have a 20pc stake in the new group to ensure that GE met its commitments to avoid closures and redundancies and develop the business. Earlier he had performed a 'u-turn’, rejecting a rival offer from Siemens and Mitsubishi he had previously supported.
He had told Bouygues that failure to agree a price for the share sale could threaten the deal.
Bouygues has agreed a call option with the French government under which the state can acquire a maximum of 20pc of Alstom from Bouygues stake, within 20 months of the completion of the GE deal.
The option includes the condition that the price of the stake is worth at least €35 per share, a significant improvement on the government’s previous offer for €28 a share.
Bouygues clinched the improved deal even though its negotiating position was thought to be weakened by its need for government intervention to reform the telecoms sector and ease the pressure on its own troubled business.
The Alstom board unanimously approved the GE offer over the weekend, declaring that the deal not only addressed the needs of the company and its shareholders but also provided the assurances sought by the government.
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