According to Bloomberg, which cites unnamed sources close the deal, GE and Alstom have already held talks with the French government about the proposed takeover to preemptively discuss potential political concerns. The sources state that an agreement could be announced as early as next week.

Alstom responded to the rumours, which have been widely reported since the story broke on Wednesday night, by issuing a statement on its website declaring that it has "not [been] informed of any potential public tender offer for the shares of the company." It added that it plans to communicate its annual results on May 7 "as planned" and that it will "use this opportunity to give an update on the prospects of its activities."

GE has refused to comment publically on the reports.

Shares in Alstom jumped by as much as 18% in Paris trading on Thursday, the company's single biggest increase since 2004, before falling back slightly.

Alstom's value has fallen by about 30% during the year up to March over concerns about its cashflow, while in its nine-month results in January the company said its profits had fallen by 12% following a drop in demand for power plants. In November the company said it would sell a stake in its Transport division as well as other assets worth up to €3bn by the end of 2014 and shed 1300 jobs.

GE's railway business would benefit from access to Alstom's passenger train and railway signalling technology. It could potentially tap into $US 57bn in cash reserves held outside of the United States to finance the deal, with a potential $US 13bn offer around 25% above Alstom's current market value.