France agrees to EU's tough conditions on Alstom rescue

France vowed to keep the core business of its TGV high-speed train makers Alstom in French hands yesterday, despite agreeing to a four-year timetable to sell off part of the company.

France vowed to keep the core business of its TGV high-speed train makers Alstom in French hands yesterday, despite agreeing to a four-year timetable to sell off part of the company.

Jean-Pierre Raffarin, the French prime minister, said his government "fought with determination" to win the backing of EU competition authorities to approve a €2.2bn (£1.5bn) state-backed rescue package.

Alstom's chairman, Patrick Kron, ruled out any partnership with Germany's Siemens, which is the its main rival, saying such a deal is "not in the interests of our customers, our employees or our shareholders." However he noted comments from ABB, a Swiss-Swedish industrial group that has expressed interest in a possible turbines alliance with Alstom.

Under the agreement made with the EU Competition Commissioner, Mario Monti, Alstom must sell off businesses worth about 10 per cent of its revenue and will be barred from using its new injection of state aid to make purchases in the transport sector for four years.

Over the same period, the French government must withdraw from the company's capital and Alstom must form "industrial partnerships" with other companies that must not be French state-owned - making some form of foreign alliance unavoidable. However few details have emerged of the kind of partnerships Alstom will have to make.