On Monday, the French industrial group Alstom announced it had agreed to drop the price of its energy branch, which it is planning to sell to General Electric. This was so Brussels was more likely to agree to the deal. “In support of General Electric’s proposed measures to reassure the European Commission, Alstom’s administration council has unanimously agreed to financially contribute. We are reducing the original sales price of 12.35 billion euros by 300 million euros”, it said in a press release. GE presented the European Union with a list of concessions it was willing to make to avoid a veto in mid-July. They did not talk about the content.
The European Commission opened an inquiry into the transaction in February. It spoke to the American group about its concerns in June, and will announce its decision on the 11th of September. Brussels was worried about “a possible lack of competition in the gas turbine market due to this transaction”. There are only four international players in the sector: GE, Alstom, Siemens and Mitsubishi Hitachi Power Systems (MHPS).
The Commission, which regulates competition in Europe, is concerned the transaction will lead to higher prices, less choice for the customer, and less innovation in the sector. “General Electric and Alstom both think this project will be good for competition, but have agreed to study the corrective measures in order to get authorisation for the transaction”, the French group said.