France on Friday backed General Electric's revised $13.5 offer for Alstom's power and grid businesses and take a 20% stake in the French engineering company.
French Economy Minister Arnaud Montebourg made the announcement after the country's top officials met with executives of GE and rival Alstom corporate suitors Siemens and Mitsubishi Heavy Industries, according to several media reports.
"Alstom can be controlled and supported by the state," said Montebourg, The Wall Street Journal reported.
The decision could signal the end of the global takeover struggle over the French company.
Alstom's board is expected to meet later Friday to discuss the proposal, the Journal reported.
GE officials did not immediately respond to messages seeking comment on the announcement. The company's shares were down fractionally at $26.91 in early afternoon trading.
The announcement came hours after Siemens, the German engineering and electronics giant, and Japan's Mitsubishi Heavy Industries sweetened their joint takeover bid for Alstom. The corporate suitors upped their offer after General Electricsimilarly revised its rival proposal.
Siemens and Mitsubishi added Euro 1.2 billion ($1.63 billion) in new cash to their offer, raising it to Euro 8.2 billion ($11.1 billion) and boosting the valuation of Alstom's energy business to Euro 14.6 billion ($19.8 billion).
The firms also said they plan to use a single holding company to buy a 40% stake in Alstom's combined steam, power grid and hydroelectric business. An offer earlier this month had proposed using three entities.
Mitsubishi and Siemens said their new proposal would continue "to preserve Alstom's current perimeter in almost all its activities, enhances its industrial sustainability," and "strengthens its financial structure, enabling it to be approximately Euro 20 billion French listed group."
GE's new proposal came after Jeff Immelt, CEO of the Fairfield, Conn.-based corporate giant, on Thursday updated his company's offer for Alstom's power and grid businesses.
Immelt proposed that GE and Alstom would establish two 50-50 joint ventures "to strengthen France's and Alstom's presence in energy and support its energy transition." Under the proposal, the companies would also create a third 50-50 joint venture, based in France, that would combine the two firms' grid assets into a global business.
Additionally, GE's proposal called for creating a France-based 50-50 joint venture in renewable energy, consisting of Alstom's offshore wind and hydroelectric businesses.
GE said the offer would create a global nuclear and French steam alliance to assure security and growth of nuclear steam technology for France and a formalize a memorandum of understanding to strengthen Alstom's transportation business.
GE said it was committed to creating 1,000 new jobs in France during the next three years under the proposal. That pledge was aimed at addressing one concern of French officials.
The revised offer lowered GE's earlier $17 billion bid for Alstom's businesses because GE would sell its rail signaling unit to the French company. But the valuation of the Alstom assets remain unchanged, GE said.
Immelt said GE had reached agreements with Alstom's management that will "create an alliance between our companies in both spirit and practice" while creating jobs, strengthening France's presence in the energy business, reinforcing Alstom Transport and ensuring "that the Alstom name will endure."
"This proposed alliance also preserves the value of this deal for GE investors," said Immelt.
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