Alstom paid $772M in US fines — then sold its crown jewels to GE

Any company operating across borders needs a compliance function that is taken seriously — not just as a legal checkbox but as a strategic priority. A single US law can destroy a company that thought it was beyond reach.

Alstom was a French industrial jewel: it built the world's fastest trains (TGV), supplied turbines for nuclear power plants, and employed 90,000 people worldwide. For a century it was a symbol of French engineering. By 2014, however, the company was in grave trouble — not because its products were bad, but because its executives had paid bribes to win contracts in Indonesia, Saudi Arabia, Egypt, and other countries, and the United States Justice Department had caught them.

The US investigation under the Foreign Corrupt Practices Act began in 2009. In April 2013, Alstom's senior executive Frédéric Pierucci was arrested at JFK Airport. He was held for 14 months without bail in a US prison — an extreme measure that sent a signal to Alstom's board: cooperate or face worse. In December 2014, Alstom pleaded guilty and agreed to pay $772 million, the largest FCPA fine at the time. The company was suddenly desperate for cash.

In April 2014 — while the DOJ investigation was still active and Pierucci was in prison — Alstom's CEO Patrick Kron opened secret talks with General Electric to sell the company's energy business. The energy division was Alstom's crown jewel; it accounted for roughly 70% of the company's revenue. The French government opposed the deal, issuing a decree to block foreign takeovers of strategic industries. But the pressure from the US legal case was overwhelming. In June 2014 the government relented and approved the sale.

The deal closed in November 2015. GE paid €12.4 billion for Alstom's power and grid businesses. Alstom kept its rail division (now Alstom Transport), but the company was permanently halved. The energy industry has debated ever since whether Alstom had to sell or whether the US weaponised the FCPA to eliminate a competitor. Pierucci's book 'The Alstom Affair' became a French bestseller arguing the latter. What is indisputable: a US law — applied to a French company for conduct outside the US — forced the sale of a national champion.

The $772M fine forced Alstom to sell its energy division to GE for €12.4 billion, halving the national champion.

Alstom executives paid bribes across multiple countries because winning contracts was the easiest path — the risk of US prosecution seemed remote for a French company with no US operations

The US DOJ used the threat of indictment to pressure Alstom: disqualification from US contracts would have been far more costly than the $772 million fine

Pierucci's arrest and detention without bail was a tactic that terrified Alstom's board — the US would make the company's life unbearable if it fought back

GE saw a weakened competitor and a distressed asset — the acquisition timing, during the DOJ investigation, was not coincidental: Alstom had no ability to negotiate a better price

A law that applies to everyone means everyone is a target. Alstom's executives thought the FCPA was an American problem. The US Justice Department proved it was everyone's problem.

Alstom's rail division continues as Alstom SA. The energy business was absorbed into GE, which struggled to integrate it. GE's power division, the company's largest, suffered from the merger and from broader market declines. By 2018 GE had lost 60% of its market value, with the Alstom acquisition cited as an expensive bet that failed to deliver. The lesson for French business was lasting: companies that operate on US soil or in US dollars are subject to US law, regardless of headquarters.