Article originally written on 29th April 2014
“Two households, both alike in dignity,
In fair Verona, where we lay our scene,
From ancient grudge break to new mutiny,
Where civil blood makes civil hands unclean.
From forth the fatal loins of these two foes
A pair of star-cross’d lovers take their life;
Whose misadventured piteous overthrows
Do with their death bury their parents’ strife.”
― Romeo & Juliet, William Shakespeare
A modern day love story has been taking place and it is in fair Paris where we lay our scene. General Electric, our fair Romeo has been courting Alstom, our Juliet and the darling of French Industry. Like the love between Shakespeare’s famous heroins, there has been much national debate within La Belle France and President Hollande is determined ‘to defend the strategic interests of France’.
Consequently the past week has seen much tension. The French government, like a strong House of Capulet, has threatened to block any deal that they see as unfit for Alstom, and the Elyse Palace reiterated that ‘both bids needed to be evaluated…and time should be taken to reach a decision’. Arnaud Montebourg, France’s Industrial Minister, has even gone so far as to charge Alstom’s CEO Patrick Kron with ‘a breach of national ethics’ for attempting to negotiate a deal with GE behind the government’s back.
Reading this, one could be forgiven for thinking that the French government actually still owned a stake in Alstom. The irony of such sentiments is that they have not owned a stake in Alstom for several years now. Despite the pressure, the Alstom board want to stick by their Romeo and favour the GE bid that makes more industrial sense, has fewer competition concerns and will give Alstom more financial upside from GE’s $57bn offshore cash pile. Yet, like an overbearing Shakespearian parent, the French Government have insisted that Siemens is a better suitor for Alstom, with the German bid representing an easier political pill to swallow for the French government who could claim the creation of two “European Champions”.
Here in lies the problem of the French Republic’s role as matchmaker in deals concerning French companies. In putting its political image concerns first, the French government have ignored those that should truly hold the key to Alstom’s fate – its shareholders. Shouldn’t they be the ones to decide the fate of their own company? President Hollande would we wise to heed the warnings of Shakespeare’s Romeo & Juliet and let two lovers find their own course, before an ever increasing precedent in French corporate history is proved to be their poison.