Deals and IPOs

French warn GE as Siemens plans Alstom hijack

GE's French dilemma: Alstom

General Electric's (GE) chief executive, Jeff Immelt, met French President Francois Hollande and Arnaud Montebourg, his economy minister, on Monday to discuss the U.S. company's bid for Alstom amid news of a rival bid from Siemens of Germany.

As speculation surrounding the future of the French engineering giant entered its sixth day, news emerged that Montebourg had sent a letter to Immelt late last week stressing that any bid would have to be approved by the French government first.

"We have been surprised to learn that General Electric and Alstom had engaged in advanced discussions," Montebourg said in the letter, which was posted online over the weekend by French broadcaster BFMTV.

Read More GE in talks to buy Alstom's global power arm: Sources

"We do not believe that creating a fait accompli by publicly announcing a transaction prior to having entertained any discussion with the relevant authorities would be a wise course of action."

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Afterward the meeting, Immelt said in a statement that he was committed to working with Hollande.

"It was important to hear in person President Hollande's perspective and to discuss our plans, our successful track record of investing in France, and our long-term commitment to the country. We understand and value his perspective, and we are committed to work together," he said.

Interest surrounding the deal, which has been valued at around $13 billion according to Reuters news agency, began last week and sent shares in the French industrial company soaring 18 percent at the start of trading Thursday. Alstom—which is privately-owned but relies on orders from state-owned rail operator SNCF—has requested that the trading of its shares remains suspended until Wednesday.

Any bid by GE has been further complicated by news that its German rival, Siemens, has indicated that it could launch a rival bid. Siemens submitted a letter to the board of Alstom over the weekend to signal its willingness to discuss "future strategic opportunities."

Read MoreAlstom CEO says in talks over industrial deal

In the letter, seen by CNBC, Siemens would acquire the thermal power, the renewable power and the grid divisions in the potential deal, and considered these assets to be worth around 10 to 11 billion euros ($13.9 billion to $15.2 billion). It added that it would consider transferring part of its headquarters to France from Germany and could also leave Alstom's nuclear energy assets untouched from the deal.

Rival bid hijacks GE's Alstom plans

Additionally, Siemens has offered to contribute "significant" parts of its rail systems business to Alstom, helping it to become a "global champion", it added. It also said that any deal would not lead to layoffs for French workers for at least three years. Hollande is set to meet representatives from the company on Monday.

The German government voiced support on Monday for a deal between Siemens and Alstom, according to Reuters, saying it could offer "great opportunities" for both countries.

Reuters added that Hollande was due to meet Siemens CEO Joe Kaeser at 4 p.m. GMT on Monday, to be followed by talks with Martin Bouygues, the chairman of Bouygues, which is Alstom's largest shareholder.

Christian Noyer, the head of the Bank of France, told CNBC on Monday that the rival bids for Alstom were indicative of the difficulties facing French companies.

"The most important lesson to take out of this is that French-based enterprise may not be strong enough, whatever they want to do—engage in partnership, cooperation, or stand-alone. They are weakened by the low levels of their business margins and the insufficient competitiveness of their French activities," Noyer said.

"I think the lesson is clearly that we need to restore the level of margins and the level of competitiveness that we used to have a number of years ago."

Meanwhile, Montebourg has pledged to act in national interests and said on Twitter Monday morning that Alstom should not sell this "national jewel" behind the back of its shareholders, its employees, or the French government.

Read MoreAlstom shares rocket as it denies GE takeover talk

"We prefer to emerge stronger from this negotiation to create a global giant made in France," he said on the social media site. "GE behaves very well in France, but its bid poses problems as it stands."

Successive French governments have a long history of blocking foreign takeovers of key domestic companies, claiming that they are off vital strategic importance to the country. Last year, Paris refused to give the go-ahead to Yahoo's takeover of the French video-sharing site Dailymotion, while back in 2005 a potential 30 billion euro bid by Pepsico for food and dairy giant Danone was also halted.