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EU Approves GE Takeover of Alstom With Conditions

General Electric has overcome the last big hurdle to the largest acquisition in its history, a $13.5 billion deal for the power business of Alstom of France, after European officials agreed that GE had adequately addressed their antitrust concerns.

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The takeover deal was first proposed in April 2014, but regulators objected to the concentration of assets in the lucrative market for maintaining high-power gas turbines, used mainly in electricity generating plants.

In November, the French government accorded its approval to the deal, after having declared in May, when GE tabled the bid for Alstom, that it would oppose the acquisition as the french company was one of the country’s largest industrial conglomerates. The EC pointed out in its statement it had not identified any competition concerns regarding the renewables portion of the deal.

Divestment of Alstom’s key technology to produce heavy duty gas turbines in Ansaldo will ensure that European business and consumers continue to benefit from this innovation and know how, said Margrethe Vestager, the EU’s competition commissioner.

GE shares closed up 4 per cent at $24.96 after the European approval was announced, the biggest gainer in the Dow Jones industrials index.

This time around, the Fairfield, Conn.-based buyer was able to appease Brussels watchdogs by offering to divest the main, technologically most advanced parts of Alstom’s heavy-duty gas turbine business to Ansaldo, an existing competitor in the highly concentrated sector.

Conversely, GE expects cost synergies of $3bn from the deal over the next five years. “The cooperation among the various agencies has enabled a thorough review of the transaction, and we are happy to now have these important clearances that we need to proceed towards closing”.

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

The unit, which provides aftermarket parts and services for gas turbines, will be sold to Ansaldo Energia, which is 40 percent owned by Italian state-backed investment fund Fondo Strategico Italiano and another 40 percent by China’s Shanghai Electric.

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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.

GE Set to Receive Approval from EU for Alstom Takeover