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Alstom General Electric in France REUTERS/Vincent Kessler
Image: Reuters

EU probes GE-Alstom deal

February 23, 2015

The European Commission has opened an investigation into the planned sale of Alstom's energy division to General Electric. There are fears the merger could lead to less consumer choice in the future.

https://p.dw.com/p/1EgFn

The EU executive on Monday started an investigation into the GE's planned acquisition of Alstom's energy division in line with a deal struck last year and involving the sale of the French company's thermal power, renewable power and grid businesses.

The European Commission said the probe was launched on suspicion the merger could lead to less consumer choice and higher costs as it would eliminate "one of the three main global competitors to GE" in the market for heavy-duty gas turbines used in gas-fired power plants, the rivals hinted to being Alstom, Germany's Siemens and Japan's Mitsubishi Hitachi Power Systems.

"We are concerned that the proposed acquisition might not only lead to higher prices, but also result in less innovation in the sector," EU Competition Commissioner Margrethe Vestager said in a statement.

Huge market share

The GE-Alstom merger would control around 50 percent of the global market, excluding China, the EU watchdog said.

By reaching its 12.4-billion-euro ($14.1-billion) deal with Alstom, General Electric beat off fierce competition from Siemens last year, but then had to accept a working partnership with the French government and also had to hand over its train signaling operation to Alstom's high-speed rail unit, which is known for its TGV trains.

The European now has until July 8 to make a decision on the planned merger. If its fears are substantiated, it can demand concessions from GE.

hg/sgb (AFP, dpa)

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