Released September 14, 2015 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)-- - The European Commission (EC) has given its blessing to the planned $14 billion takeover of French engineering firm Alstom S.A. (Levallois-Perret, France) by power and manufacturing firm General Electric Company (NYSE:GE) (Fairfield, Connecticut).
Announced by Margrethe Vestager, the European Union (EU) competition commissioner, the deal was cleared after both companies agreed to measures that will address antitrust concerns. This will include the sale of some of Alstom's heavy-duty gas turbines (HDGT) business to Italian rival Ansaldo Energia (Genoa, Italy). The U.S. Department of Justice also gave the deal its seal of approval.
Heavy duty gas turbines are used mainly in gas-fired power plants. GE is the world's largest HDGT manufacturer and Alstom is placed as the number three or four player globally, according to the EC. The Commission had competition concerns that the merger would result in just one major European rival in the sector, Siemens AG (NYSE:SI) (Munich, Germany). The Commission classes Ansaldo as "a niche player with a more limited geographic reach."
"I am glad that we can approve this transaction, which shows that Europe is open for business and that Europe-based technology can thrive and attract foreign investment," explained Vestager. "We have had a very close and successful cooperation with the Antitrust Division of the US Department of Justice both as regards the investigation and the analysis of suitable remedies. Divestment of Alstom's key technology to produce heavy duty gas turbines to Ansaldo will ensure that European business and consumers continue to benefit from this innovation and know how."
She added: "Furthermore, advanced heavy duty gas turbine technology is crucial to face the challenges of climate change and modernizsing our energy supply. It is the most efficient, cleanest and flexible fossil fuel power generation technology and an important complement to more unpredictable generation from renewables - when the wind stops blowing it is mostly flexible gas-fired plants that can step in."
Principal Deputy Assistant Attorney General Renata B. Hesse, of the U.S. Justice Department's Antitrust Division, said: "The acquisition as originally proposed would have eliminated General Electric's primary competitor in the supply of aftermarket parts and services for GE gas turbines in the United States. We appreciate the close cooperation of the European Commission, which greatly facilitated our investigation and helped formulate remedies that will preserve competition in the United States and internationally."
The deal is the biggest ever conducted by GE and forms the foundation for the company's shift away from finance and back to its industrial roots. It also lays to rest the ghost of its failed $42 billion merger with Honeywell International Inc. (NYSE:HON) (Morristown, New Jersey) in 2001, which was blocked by the EC.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
Announced by Margrethe Vestager, the European Union (EU) competition commissioner, the deal was cleared after both companies agreed to measures that will address antitrust concerns. This will include the sale of some of Alstom's heavy-duty gas turbines (HDGT) business to Italian rival Ansaldo Energia (Genoa, Italy). The U.S. Department of Justice also gave the deal its seal of approval.
Heavy duty gas turbines are used mainly in gas-fired power plants. GE is the world's largest HDGT manufacturer and Alstom is placed as the number three or four player globally, according to the EC. The Commission had competition concerns that the merger would result in just one major European rival in the sector, Siemens AG (NYSE:SI) (Munich, Germany). The Commission classes Ansaldo as "a niche player with a more limited geographic reach."
"I am glad that we can approve this transaction, which shows that Europe is open for business and that Europe-based technology can thrive and attract foreign investment," explained Vestager. "We have had a very close and successful cooperation with the Antitrust Division of the US Department of Justice both as regards the investigation and the analysis of suitable remedies. Divestment of Alstom's key technology to produce heavy duty gas turbines to Ansaldo will ensure that European business and consumers continue to benefit from this innovation and know how."
She added: "Furthermore, advanced heavy duty gas turbine technology is crucial to face the challenges of climate change and modernizsing our energy supply. It is the most efficient, cleanest and flexible fossil fuel power generation technology and an important complement to more unpredictable generation from renewables - when the wind stops blowing it is mostly flexible gas-fired plants that can step in."
Principal Deputy Assistant Attorney General Renata B. Hesse, of the U.S. Justice Department's Antitrust Division, said: "The acquisition as originally proposed would have eliminated General Electric's primary competitor in the supply of aftermarket parts and services for GE gas turbines in the United States. We appreciate the close cooperation of the European Commission, which greatly facilitated our investigation and helped formulate remedies that will preserve competition in the United States and internationally."
The deal is the biggest ever conducted by GE and forms the foundation for the company's shift away from finance and back to its industrial roots. It also lays to rest the ghost of its failed $42 billion merger with Honeywell International Inc. (NYSE:HON) (Morristown, New Jersey) in 2001, which was blocked by the EC.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
