FRANCE chose General Electric (GE) to form an alliance with Alstom on Friday, rejecting an offer from Siemens and Mitsubishi Heavy Industries, but said the deal still needed some work and added the government would buy a 20 percent stake in the hotly-contested company.

    Economy Minister Arnaud Montebourg said he had used a newly created state decree to reject both of the existing offers as not being in France’s strategic interest, and had formulated fresh demands for GE chief executive Jeff Immelt.

    The decision ended weeks of suspense surrounding one of Europe’s fiercest industrial battles in years, but left open major questions about the final shape of an alliance which GE hopes will give it access to new power markets.

    “The points we have raised with General Electric are precise and technical but necessary,” Montebourg told a news conference after two days of talks involving the bosses of the three suitors, President Francois Hollande and top ministers.

    He said France had demanded strict conditions “guaranteeing energy independence, job creation on national territory, and maintenance of decision-making centres in France.”

    He said the offer from Siemens and Mitsubishi Heavy Industries was “very serious” and that he had backed it, but that the government “had made up its mind.”

    “The offers were of equal quality, but the truth is the negotiations were much more advanced between Alstom and GE,” said an Hollande aide.

    Siemens said it respected and understood France’s efforts to preserve its national interests.

    (SD-Agencies)