Europe’s politicians are expressing growing concern over two takeover bids by American companies for flagship European businesses.

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General Electric (GE) has made a €12.4 billion bid for the energy business of Alstom, a flagship French industrial company that makes nuclear turbines and high-speed trains. Arnaud Montebourg, France’s pugnacious minister for the economy, on Monday (5 May) wrote to GE’s chief executive questioning the takeover’s impact on French jobs and innovation. He indicated that the French government opposed the offer in its current form, a view reinforced by François Hollande, France’s president, the following day.

The United Kingdom government has expressed concern that attempts by Pfizer to buy Anglo-Swedish drug maker AstraZeneca for £63bn (€77bn) would lead to job losses in the UK and a loss of expertise. It has raised the possibility of intervening on the basis of national interest.

Anders Borg, Sweden’s finance minister, on Tuesday (6 May) used an interview with the Financial Times to warn the UK government that Pfizer had broken promises it gave to the Swedish government to maintain jobs in a 2002 takeover of a Swedish company. UK politicians were quick to cite US company Kraft Foods’ acquisition of Cadbury, which led to the closure of a flagship factory in the UK despite promises to the contrary.

Astrazeneca, which has rejected Pfizer’s bid, has asked the UK government to stay out of negotiations. But a UK parliamentary committee on Tuesday (6 May) announced that it would summon Pfizer executives for questioning.
In France, Montebourg has indicated that he would prefer a belated bid by Siemens to the merger with GE. Siemens proposed a cash and asset swap which would involve Siemens’ train building business going to Alstom in exchange for the latter’s energy activities. This would create European brand-leaders in the field of energy equipment and rail transport.

Michel Barnier, the European commissioner for the internal market and services, who is acting commissioner for industry while Antonio Tajani is campaigning for the European Parliament elections, said that the case illustrated “the need for an industrial strategy at the EU level because it is not possible for a group like Alstom to develop on a merely national basis”. French law allows the government to intervene in mergers involving sensitive sectors such as the defence industry. It is not clear whether this would extend to Alstom’s energy business.

Both takeovers, if they went ahead, would need competition approval from the European Commission. Even if certain Commission policies have favoured the emergence of European champions, such as in the field of airplane building or space exploration, attempting to build such businesses through mergers could run foul of EU competition rules.

Several French companies have been taken out of French hands in recent months. Swiss cement-maker Holcim is buying Lafarge in a €32bn merger, while Luxembourg-based telecoms firm Altice is buying SFR for €17bn.