1st Mar 2024

EU approves US takeover of French engineering giant

After a six-month competition probe, the European Commission approved Tuesday (8 September) the acquisition of France's Alstom by General Electric (GE) of the US.

The €12.5 billion deal "would not harm effective competition on EU markets" after GE agreed to sell off parts of Alstom's heavy duty gas turbines business to Italian company Ansaldo, competition commissioner Margrethe Vestager said at a press conference in Strasbourg.

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  • GE will have to sell Alstom's heavy duty gas turbine business in Europe (Photo: Alstom)

GE will nevertheless have to get the commission's approval of the effective divestiture before it can go ahead with the merger.

The commission launched a probe in February over "potential competition concerns" on the heavy duty gas turbine market.

"There was a great risk of choice going down and prices going up," Vestager said, adding that Ansaldo would "be able to replace Alstom's role on this important market".

"Eighty percent of the merger was unproblematic," she said, because GE and Alstom activities complemented each other and did not alter competition.

General Electric's takeover of Alstom was announced in June 2014.

At the time, GE won a battle against the French government, which first opposed the deal, and tried to seal an alliance between Alstom, which it called "a national jewel", and Germany's Siemens.

The government accepted the deal when it was agreed that the French state would acquire 20 percent of Alstom, which remains a world leader in the rail industry.

GE also committed to invest €2.6 billion in the three sectors of the venture: steam turbines for nuclear plants, energy networks, and renewable energies.

The merger will reinforce General Electric's position as world leader in the electricity plants market.

Vestager said the deal was important for Europe because "it shows that Europe is open for business", provided that "you play by the same rules as anyone else".

Also important, she said, was the fact that the deal would "ensure that existing European know-how is preserved and that there is room for future high-tech innovation".

The commissioner praised the good cooperation between her services and the antitrust division of the US Department of Justice and took the opportunity to speak highly of the transatlantic free-trade agreement (TTIP) under discussion between the EU and the US.

"We have come a very long way with the TTIP," she said.

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