GE may sell Alstom’s gas turbine assets to gain EU anti-trust approval
29 July 2015
US-based General Electric (GE) has confirmed it is prepared to sell parts of Alstom's gas turbine assets to Italian Ansaldo Energia in order to gain European Union approval for the proposed $17bn acquisition of Alstom's power business.
Sources have been quoted by Bloomberg as saying that GE informed the EU that it is willing to divest some of Alstom's sale and servicing activities to the Italian firm, along with certain intellectual property.
Alstom has also agreed to lower the prices of its energy assets to support GE's efforts to win anti-trust clearance from the European authorities.
"The transaction…may increase the prices of large gas turbines in Europe, as Siemens will be the lone competitor in the market."
The firm may accept €300m ($333m) less than the previously agreed offer for its power turbines unit from GE, reports Reuters.
Alstom said: "In order to support General Electric in its offering of a comprehensive set of remedies addressing the concern of the [European] Commission, Alstom's board. would contribute financially to such remedy package through a reduction of €300m.
"The parties continue to have constructive discussions with the commission regarding the transaction."
The firm will now receive between €3.2bn and €3.7bn following the closure of the deal, which was previously expected to be higher, at €3.5 to €4bn.
Earlier in the month, GE announced it had offered concessions to address the EU's regulatory concerns about the deal. At that point it had not disclosed the details about the proposed concessions.
According to EU regulators, the transaction, which was announced more than a year ago, may increase the prices of large gas turbines in Europe, as Siemens will be the lone competitor in the market.Source: www.power-technology.com