Alstom refocuses on rail after General Electric deal

France's Alstom, which is selling most of its energy equipment business to General Electric, said it expected its remaining rail arm to grow and generate cash this year after registering record orders in the first half.

Over the medium term, the engineering group said it expected sales at the "new Alstom" to grow over 5 per cent per year like-for-like and its operating margin to gradually improve within a 5 to 7 per cent range.

Alstom said in a statement that it would hold a shareholder meeting on December 19 to approve the €12.4 billion (HK$120.36 billion) deal with General Electric, which won approval from French Economy Minister Emmanuel Macron yesterday.

"The project with General Electric is progressing well," said chief executive Patrick Kron.

The level of cash to be returned to shareholders from the deal, as well as the group's targeted balance sheet once it refocused on its smaller transport arm, would be communicated ahead of the meeting, Kron said.

Some analysts expect Alstom to put aside about €2 billion for rail acquisitions and return €2 billion to shareholders through a special dividend or share buy-back.