The Financial Times reports that the Alstom board has accepted a $US 12.35bn cash offer from GE, but that it has left the door open to a counter bid from Siemens. In a statement issued on Wednesday morning, Alstom says that it has established a committee of independent directors, led by Mr Jean-Marc Folz, to review the proposed transaction before the end of May, and to consider "all stakeholder interests including the French state." Alstom CEO Mr Patrick Kron and the committee will liaise with the French government to consider its views.

Alstom says that if the proposed transaction goes through the remaining Transport division, which had a turnover of €5.5bn in 2012-13, would be led by its current management with Bouygues as a long-term shareholder.

"The proposed transaction would allow Alstom to develop its Transport business as a standalone company, with a strong balance sheet to capitalise on opportunities in the dynamic rail transport market," Kron says.

However, the delay in approving a deal with GE leave Siemens with enough time to launch a formal offer, a move that the German company confirmed that it is exploring yesterday, and which is seemingly favoured by the French government.

In a letter sent to the French group, Siemens asked for access over the next four weeks, a move confirmed by Alstom which acknowledged Siemens' declaration of interest. It says that Siemens' intentions will be reviewed in light of Alstom's corporate interest and the views of all stakeholders, but that it will not solicit offers for all or part of its energy business from other third parties. However, if Alstom does decide to proceed with another offer, it has committed to pay GE a break-up fee of 1.5% of its bid.

Siemens said over the weekend that it envisages the formation of two European industrial champions, itself in energy and Alstom in transport by transferring its high-speed rail technology. However, it is understood that Siemens would retain ownership of its urban and regional train and signalling divisions.

Ultimately it appears that the deal's fate hinges on French politics. President Francois Hollande's government stepped into the negotiations last week in an effort to protect what it sees as a strategic industrial asset and "secure a better deal for Alstom," which was described by industry minister Mr Arnaud Montebourg as a national "industrial jewel." Montebourg also accused Kron of "a breach of national ethics" for attempting to negotiate the GE deal without government involvement.