GE GE Aerospace

By Inti Landauro

PARIS-- The board of French engineering firm Alstom SA (ALO.FR) late Wednesday recommended distributing to shareholders between 3.5 billion and 4 billion euros ($4.36 billion and $4.98 billion) from the proceeds of the sale of most of its power equipment business to larger rival General Electric (GE).

According to an agreement signed between both companies earlier his year, General Electric offered to pay EUR12.35 billion for most of Alstom's division that manufactures heavy equipment for power plants.

In a statement released Wednesday evening, Alstom's board recommended that the company use two thirds of the proceeds from the sale to clear its balance sheet.

The maker of French signature bullet train plans to concentrate on its rolling stock manufacturing business as its power division has suffered over the past few years as a result of stagnant demand from electricity utilities.

Write to Inti Landauro at inti.landauro@wsj.com

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