Alstom and GE in merger talks?

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)