Get 40% Off
🤯 Perficient is up a mind-blowing 53%. Our ProPicks AI saw the buying opportunity in March.Read full update

GE offers concessions in bid for EU clearance of Alstom deal

Published 07/16/2015, 06:42 PM
© Reuters. The logo of Alstom is pictured during an inaugural visit of the Alstom offshore wind turbine plants in Montoir-de-Bretagne

By Foo Yun Chee

BRUSSELS (Reuters) - U.S. conglomerate General Electric (N:GE) has offered concessions in an attempt to counter EU regulatory concerns about its 12.4-billion-euro ($13.49 billion) bid for French peer Alstom's power unit, its biggest ever acquisition.

The company submitted its proposal on Thursday but did not provide details.

"GE confirms it has submitted remedies to the European Commission in relation to the GE-Alstom transaction. These remedies address the concerns of the Commission and at the same time preserve the economic and strategic value of the deal," the company said in a statement.

The concessions will have to address the European Commission's worries that the deal could hurt competition as it would result in the merged gas turbine company competing with only German rival Siemens (DE:SIEGn).

The EU competition authority is likely to extend its scrutiny to mid-September from Aug. 21 as it seeks feedback from rivals such as Siemens, Mitsubishi Hitachi Power Systems, Toshiba Corp (T:6502), Italian company Ansaldo (MI:STS) and customers.

Selling off some of Alstom's intellectual property or physical equipment lines would be considered limited concessions to win EU approval, Sanford Bernstein analyst Steven Winoker said in a research note last month.

GE has drawn the line against divesting anything that would hurt business gained from servicing gas turbines, which generate lucrative revenues.

GE got a taste of how tough EU regulators could be in 2001 when they rejected its planned $42 billion takeover of Honeywell International (N:HON) despite the green light from U.S. authorities.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

However, this time a veto is seen as unlikely as it could stir up a political storm in France and the United States.

($1 = 0.9195 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.