General Electric CEO Jeff Immelt Bullish About Alstom Deal
GE CEO Jeff Immelt bullish about Alstom deal.Reuters

General Electric's chief executive Jeff Immelt has said that GE will "work constructively" with the French government on its bid for Alstom's energy division and that he expects the deal to close.

GE's $16.9bn (£10bn, €12.3bn) proposal has run into opposition from Paris, which has sought to encourage larger German competitor Siemens as a probable rival bidder.

However, Immelt told an investor conference in Florida that, "we wouldn't have started if we didn't think we could finish," reported Reuters.

Immelt said a deal will expedite GE's goal of transitioning toward its industrial businesses and away from its finance unit. GE expects 75% of its earnings to come from industrial businesses by 2016, up from 55% in 2013.

Toward that goal of cutting down its finance exposure, Immelt said the company expects to float its North American retail finance business in the third quarter. GE has filed for an IPO for the business and plans to offload up to 20% of the business through the stock sale.

The troubled French engineering conglomerate's shares were trading 2.44% higher at 12:56 hrs CEST in Paris. GE's stock was trading 0.23% higher in pre-market trade in New York after finishing 0.72% higher on 21 May.

Alstom Distraction

Asked about the likelihood of a lengthy takeover battle for Alstom turning into a distraction for GE, Immelt said: "You have to trust us a little bit that we know what we're doing."

"We know how to work with governments. We have an impeccable reputation in France. I don't sit here and say, 'God, I'm surprised.' We've done this before."

"It's a deal that's executable. It's a deal we're experienced in. It's a deal we expect to close," Immelt told an Electrical Products Group conference.

French Takeover Law

The French government last week boosted its takeover law with lawmakers creating new powers to prevent foreign takeover of "strategic" industrial groups, throwing up a potential obstacle to GE's bid.

GE Offer

Immelt has told French President Francois Hollande that an acquisition by GE will boost employment in France. The global headquarters of several key divisions, including hydro power, offshore wind and steam turbines will be based on French soil.

GE is also keen on working with the French government, utility EDF and nuclear group Areva to protect France's strategic nuclear sector and its exports.

The American firm also proposes to sell Alstom's wind turbine business to French investors.

Besides, GE has offered France a representative on its board, and will explore the possibility of a transportation joint venture with Alstom's remaining transport activities, believed to be too small to subsist independently.