US and Europe clear General Electric to buy Alstom energy units
General Electric got the go-ahead from European and US competition authories to buy most of Alstom SA's energy business, boosting chief executive officer Jeffrey Immelt's attempt to return GE to its industrial roots.
GE's pledge to sell gas-turbine assets to an Italian rival, Ansaldo Energia, helped allay antitrust concerns over the plan, the European Commission said in a statement yesterday.
The US Justice Department announced its approval in a statement minutes later.
"Divestment of Alstom's key technology to produce heavy- duty gas turbines to 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.
The EU's blessing removes a crucial hurdle for GE to close an acquisition central to Immelt's plan to reshape the company around its manufacturing divisions and pivot away from finance.
In 2001, European regulators blocked the company's takeover of Honeywell International, a failure that shadowed the months-long review of the Alstom deal. The commission had argued the Alstom tie-up may have thwarted innovation and triggered price rises by leaving only Siemens AG as GE's main rival in Europe in the market for gas turbines used in gas-fired power plants.
The EU regulator said GE's concessions address its concerns and warrant the conditional approval more than a year after the company placed its offer for France's Alstom.
General Electric will be allowed to complete the acquisition once the EU has formally assessed and approved the finalised divestiture plans. (Bloomberg)