France chose General Electric to form an alliance with the power and rail company Alstom on Friday, rejecting an offer from Siemens and Mitsubishi Heavy Industries (MHI), but said the deal still needs some work and the government will buy a 20 percent stake in the hotly contested company.
Economy Minister Arnaud Montebourg said he had used a newly created state decree to reject both of the existing offers as not being in France's strategic interest, and had formulated fresh demands for GE Chief Executive Jeff Immelt.
The decision ended weeks of suspense surrounding one of Europe's fiercest industrial battles in years, but left open major questions about the final shape of an alliance that GE hopes will give it access to new power markets.