Saudi- GE wins green light for Alstom buyout

(MENAFN- Arab News) NEW YORK: US antitrust regulators said they approved General Electric's purchase of Alstom's energy assets after the US giant agreed to divest some of the French company's key gas turbine assets.

The US Department of Justice said it had worked closely with European Union antitrust regulators who also cleared the deal Tuesday after GE agreed to sell some maintenance service assets to Italian rival Ansaldo Energia.
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.
This market is dominated by GE with a 50 percent share followed by Siemens of Germany Mitsubishi Hitachi Power Systems Alstom and Ansaldo Energia.
'The acquisition as originally proposed would have eliminated General Electric's primary competitor in the supply of aftermarket parts and services for GE gas turbines in the US' said Renata Hesse principal deputy attorney general in the antitrust division at Justice in a statement.
'We appreciate the close cooperation of the European Commission which greatly facilitated our investigation and helped formulate remedies that will preserve competition in the United States and internationally.'
The parallel approvals by European and US antitrust regulators for the Alstom deal marked a victory for GE chief executive and chairman Jeff Immelt who has made the Alstom purchase a building block in his efforts to focus the conglomerate on industrial assets while divesting major finance businesses.
'Today's decisions by the European Commission and Department of Justice are major milestones in completing this deal as early as possible in the fourth quarter' Immelt said in a separate statement. 'We have addressed the EC's and DOJ's competition concerns while preserving the strategic and economic drivers of the deal.'
The purchase price is expected to be about 8.5 billion euros ($9.5 billion) down from the initial takeover agreement at 12.35 billion euros that was subsequently adjusted for changes in the deal and remedies to address antitrust concerns among other factors GE said.