Alstom is considering a $16.9 billion offer from GE for its energy division, but left the door open to a bid from Siemens. GE has made an all-cash offer for Alstom's thermal power, renewable power and grid businesses - valued at 7.9 times pro forma earnings before interest, taxes, depreciation and amortization (EBITDA). However, Alstom has given Germany-based Siemens the chance to enter its own bid by the end of May.

From media reports, it seems that the French government was not in favor of a deal between GE and Alstom because of a potential threat to jobs in France. However, Economy Minister Arnaud Montebourg "softened his tone" after the deal emerged, according to a Reuters report. "We are ready to discuss alliances, not an absorption. We prefer an equal alliance," he said, citing GE's 40-year-old CFM jet engine venture in France with a unit of Safran as a good example of Franco-U.S. cooperation. (Reuters)

If Alstom can make a deal with GE, or even Siemens, it would be able to refocus on the transportation market, such as high-speed trains. "Alstom would use the sale proceeds to strengthen its transport business and give it the means of an ambitious development, pay down its debt and return cash to its shareholders," the group said in a statement.

GE's Chief Executive Jeff Immelt was optimistic. "We think we've got a good deal and it's going to be executed," he told reporters in Paris. "We think net employment in France will grow around the Alstom assets," Reuters reported.

The two companies have turbines in common, and a deal would allow GE to expand into grid technology. Alstom is strong in steam turbines used by the nuclear industry, while GE is a top player in gas turbines.