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

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.