European Union approves GE’s $13.4 billion takeover of Alstom’s power assets

Despite the asset sales, people close to GE stressed that the economic and strategic value of the deal had been preserved.

He devoted over a year to careful diplomacy at the corporate level in pursuing this goal, first in winning the endorsement of the French government and then in a process, that was far more protracted gaining the regulators antitrust approval in Brussels.

Under the commitment, GE will sell Alstom’s technology for two models of large gas turbines, “a large number” of Alstom’s turbine research engineers, two test facilities in Switzerland and Alstom’s Florida-based servicing business.

The stock was up 3.54% at $24.85 in afternoon trading after the European Commission approved the deal and the U.S. Department of Justice filed a proposed consent decree that would allow the acquisition to close.

Upon completion of the transaction, Alstom plans to focus on its Transport business as part of its growth strategy while GE expects cost synergies of $3bn over the next five years.

In order to win the green light from the European Commission, GE has had to make concessions, the source said.

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. Because GE is already the world leader in that field, its main rival in Europe, Siemens, had argued to antitrust officials that the deal would leave too much of that market in the hands of the US company.

The deal is valued at about $13.9 billion, according to a Reuters report. GE will receive a license to the PSM intellectual property used to offer after-market services for non-GE gas turbines.

Vestager pointed to the cordial ties with her USA counterparts working on the case, contrasting it with the turmoil when the Commission blocked GE’s Honeywell deal.

“What we want, of course, is effective competition in a market that has a direct impact on the prices of electricity, ” Ms Vestager said. But Bolze said divested service contracts affected only a small part of Alstom’s total base of 750 gas turbines. “It’s GE’s biggest-ever industrial deal, and the bulk of it is headed to Power & Water, which is headquartered in Schenectady”.

That is likely good news for Schenectady, which oversees GE’s gas turbine business in Greenville, S.C., and France.