EU Approves GE's Acquisition of Alstom's Energy Business
09 September 2015 - 12:50AM
Dow Jones News
BRUSSELS—General Electric Co. won approval from Europe's top
antitrust authority for its acquisition of Alstom's power business
on Tuesday after the U.S. industrial giant agreed to sell assets
that regulators hope will create a strong new competitor in
Europe.
EU regulators had worried that the deal would lead to higher
prices in Europe for large gas turbines. To assuage those concerns,
GE agreed to sell "central parts of Alstom's heavy-duty gas
turbines business" to Ansaldo Energia of Italy, the EU said in a
statement.
The divestments "will allow the purchaser to replicate Alstom's
previous role in the market, thereby maintaining effective
competition," the EU said.
The EU's approval, which follows eight months of tough
negotiations, puts GE on the brink of closing its biggest ever
deal. U.S. authorities are also expected to signal their approval
on Tuesday, a person familiar with the matter said. Around 20 other
regulators have already given the green light.
Under Tuesday's agreement, GE agreed to divest Alstom's
technology for two models of large gas turbines, as well as "a
large number" of Alstom's turbine research engineers and two test
facilities in Switzerland.
The U.S. company will also divest the long-term servicing
contracts for 34 turbines that have already been installed by
Alstom. GE has said that Alstom's servicing contracts were a key
attraction of the deal, but a person close to the deal said the
divested contracts amounted to only 4% of Alstom's total installed
base.
GE will also sell Alstom's Florida-base servicing business.
Despite the asset sales, people close to GE stressed that the
economic and strategic value of the deal had been preserved. GE has
secured a $300 million rebate from Alstom for the remedies.
Write to Tom Fairless at tom.fairless@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 08, 2015 10:35 ET (14:35 GMT)
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