An employee of the French engineering group Alstom stands in front of the logo of the United States company General Electric (GE) on April 29, 2014 in Belfort.
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As a part of this strategy, the company is looking to sell most of its financial business, while keeping those that aid the industrial segments, such as the aircraft leasing division of GE Capital. The CEO conceded his company faces “a more challenging regulatory environment, not just in Europe, but in the USA and every other region that we compete in”.
But the U.S. Department of Justice filed a lawsuit in July to block the Electrolux deal on grounds it would lead to higher prices of key cooking appliances for American consumers.
Credit Suisse analysts said the GE concessions were also positive for Shanghai Electric, as through Ansaldo acquiring Alstom assets it would gain a strong footing in the European and the USA gas turbine market.
The European Commission granted its blessing to the deal, under the EU Merger Regulations process, conditional upon the divestiture of central parts of Alstom’s heavy duty gas turbines business to Ansaldo of Italy, the body announced in a statement.
The green light will put an end to almost eight months of politically-charged altercations, in which the US giant moved mountains to convince regulators that the deal wouldn’t hurt free competition for gas turbines in Europe.
The Alstom deal was originally going to cost GE $17 billion. “It’s the right deal at the right time for GE”.
GE said the deal will give it access to one of the broadest and deepest renewables portfolios in the industry, allow it to improve total thermal power plant design, and provide it with a broader grid portfolio with the footprint and scale to compete globally.
The Alstom assets, in particular the gas and steam turbine businesses, would strengthen the US company’s footing in emerging markets such as China and India, where air pollution from coal power is a public health issue. A large but unspecified number of Alstom R&D engineers will also continue to develop the Alstom heavy-duty gas turbine technology.
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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.
