Bouygues buys Alstom stake

24 April 2008

France-Based Contractor Bouygues' Buyout of the french state's 21,01% share of Alstom was approved by the European Commission in June and the sale has now been completed. The contractor bought 29 million shares at €68,21 each - an investment of € 2 billion - and now owns 23,26% of Alstom's capital and voting rights.

When the deal was finalised stock market regulations forced Bouygues to state its intentions for Alstom for the coming 12 months. According to the statement, the company is looking to increase its interest in Alstom but does not currently plan to take full control of the company. Under French law, Bouygues would have to launch a full takeover if its ownership of Alstom exceeded 33%.

Bouygues' belief that its increased stake in Alstom would strengthen the position of both companies is already being borne out through a € 1,4 billion contract awarded in July. The two companies have signed an agreement to design, build and operate a tram network in the French city of Reims over a 30 year concession.

The two companies are also looking to further develop their relationship by forming a joint venture which will operate in the hydroelectric power market. Under the plan Alstom would contribute its entire hydroelectric power division to the new company in which Bouygues would take a 50% stake.

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