The European Commission has approved the French Government’s aid package for the engineering giant Alstom.
However, the aid itself is now subject to strict conditions – Alstom must sell assets with annual sales of 1.6 billion Euros in return for the EU approval for the aid.
To qualify for the aid package, Alstom must divest itself of its industrial boilers operations, transport operations in Australia and New Zealand, and freight locomotives in Spain, as well as 800 million Euros worth of other businesses that will be specified later.
The decision also means that Alstom must, within four years, enter into one or more long-term industrial partnerships with other companies in the transport and energy sectors.
These joint partnerships, the Commission says, must be with firms that are not individually or jointly controlled by the French Government in order that there are no state aid elements that would make the partnerships incompatible with the EC Treaty.
What’s more, to ensure that the aid is not used to pursue a policy of expansion, Alstom will not be able acquire any company in the transport sector for four years.
The French goverment must also divest itself of any capital stake within twelve months of Alstom obtaining an investment-grade rating. It will, in all events, have to do so within four years.