General Electric Co., the U.S. maker of jet engines and oilfield equipment, is in talks to buy Alstom SA, the French builder of trains and power plants, people with knowledge of the matter said.

GE and Alstom may announce an agreement as early as next week, said the people, who asked not to be identified because the talks are private. The U.S. company may pay more than $13 billion for Alstom, one of the people said. That would be about 25 percent above Alstom’s current market value.

GE has the support of shareholder Bouygues SA, said the people. The French conglomerate owns about 29 percent of Alstom, data compiled by Bloomberg show.

Representatives for GE and Alstom declined to comment on the deal. A spokesman for Bouygues couldn’t immediately be reached.

The deal would give Fairfield, Connecticut-based GE control of Alstom’s high-speed TGV trains and rail-signal technology. Shares of Alstom, which also makes power-generation equipment and power-transmission gears, have dropped 20 percent in the last 12 months as economic woes in Europe and a slowdown in emerging markets hurt demand.

Forecast Cut

Alstom, based in the Paris suburb of Levallois-Perret, in January cut its profit forecast for the second time in nine months because of weaker-than-expected sales of thermal-power equipment. Chief Executive Officer Patrick Kron in November outlined plans to sell as much as 2 billion euros in assets including a minority stake in its rail unit by the end of 2014.

In contrast, GE on April 17 posted first-quarter earnings that beat analysts’ estimates, buoyed by expanding margins in the industrial business that makes products such as jet engines.

Wider industrial margins are important because GE CEO Jeffrey Immelt is working to build up the manufacturing units while shrinking GE Capital, whose North American consumer- lending business will have an initial public offering this year.

Immelt said when GE reported earnings that the company is looking to make acquisitions in the range of $1 billion to $4 billion. They will spend more for deals “that have excellent values, strong synergies, fit our growth strategies and are immediately accretive,” he said in a conference call with analysts.

GE had cash and equivalents of $88.6 billion as of Dec. 31, of which $57 billion was held outside of the U.S., the company said in a regulatory filing.