Geothermal business part of approval for GE’s acquisition of Alstom
The EU Commission has approved GE's acquisition of Alstom. While it requires the divesture of Alstom's gas turbine business to Ansaldo, the renewable energy and steam turbine business of Alstom has thereby been approved.
Following the approval by the European Commission for GE’s acquisition of Alstom’s power and grid business following an in depth review, it becomes clear that the geothermal/ steam turbine business of Alstom will be part of the deal..
In a statement, 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 company will also gain further expertise in project expertise and financing for power projects.”
The only condition is the divesture of the heavy duty gas turbines business of Alstom to Ansaldo in Italy. Without this divesture, the EU Commission saw a too strong position of
The Commission said the approval is conditional upon the divestiture of central parts of Alstom’s heavy duty gas turbines business to Ansaldo of Italy.
It also said it had concerns that the transaction would have eliminated one of the main global competitors of GE in the heavy duty gas turbines market, where GE is the world’s largest manufacturer and Alstom is the number three or four player globally.
“This would have led to less innovation and higher prices in a market for a technology vital to meeting climate change goals. The commitments offered by GE address these concerns,” the Commission said.
It had no competition concerns with other parts of the transaction, including Alstom’s renewables business.
GE said that by 2018, with an expected additional $0.15-$0.20 per share of earnings from Alstom, its industrial businesses will generate more than 90% of GE’s operating earnings, up from 58% in 2014.