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EU opens in-depth investigation into GE' acquisition of Alstom'energy businesses

The European Union: |
The European Commission said it has opened an in-depth investigation to assess whether General Electric's proposed acquisition of the Thermal Power, Renewable Power & Grid businesses of Alstom SA is in line with the EU Merger Regulation.

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The Commission said that its preliminary investigation indicates potential competition concerns in the market for heavy-duty gas turbines which are mainly used in gas-fired power plants.

The transaction would bring together the activities of GE with those of Alstom, eliminating one of the three main global competitors to GE in this market.

The opening of an in-depth inquiry does not prejudge the final result of the investigation. The Commission now has 90 working days, until 8 July 2015, to take a final decision.

Commissioner Margrethe Vestager, in charge of competition policy, said, "We are concerned that the proposed acquisition might not only lead to higher prices but also result in less choice for customers and less innovation in the sector. Technology is and will continue to be crucial to help Europe meet its environmental commitments. Therefore, it is essential to maintain competition in the heavy-duty gas turbines market."

According to the Commission, the transaction might significantly reduce R&D and customer choice in the heavy-duty gas turbines or HDGT industry. After the merger there is a risk that GE would discontinue the production of certain Alstom HDGT models and that advanced HDGT technology developed by Alstom would not be brought to the market.

The Commission will now further investigate the proposed acquisition in-depth to determine whether its initial concerns are justified.


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