Brussels, 24/02/2015 (Agence Europe) - On Tuesday 24 February, the European Commission opened an in-depth investigation to determine whether General Electric's planned acquisition of Alstom's thermal power, renewable power and grid activities complies with EU law.
The European institution's preliminary investigations revealed potential competition concerns on the market for the sale and servicing of HDGT turbines, which are used mainly in gas-fired power stations. The transaction would bring together the activities of GE, the world's largest manufacturer of these turbines, and those of Alstom, eliminating one of the three main global competitors to GE in this market, the Commission explains in a press release. A final decision will be made by Wednesday 8 July 2015.
There are just four rivals active at global level on the HDGT turbines market: GE, Alstom, Siemens and Mitsubishi (MHPS). The global HDGT turbines market is split into two regions, depending on the frequencies used (50 Hz and 60 Hz). All of the countries of the European Economic Area (EEA) use the 50 Hz version, and MHPS is less active in this geographical area than in the rest of the world. On the market for the sale of new 50 Hz HDGT turbines, the entity created by the merger would have nearly 50% of the market share in the EEA and internationally, with the exception of China. Additionally, the planned transaction could limit innovation and consumer choice in the HDGT turbines sector, especially if GE ceased the production of certain models of HDGT turbines currently produced by Alstom. Lastly, on the market for the servicing of GE's mature technology HDGT turbines, the transaction would eliminate competition from Alstom's subsidiary, Power System Manufacturing.
At this stage, therefore, the Commission considers that the planned transaction could lead to price increases, a limitation of the range offered to consumers and reduced R&D in the HDGT sector. On the other hand, it feels that the transaction is unlikely to raise concerns in relation to power generation equipment for nuclear, coal-fired, wind and hydro power stations, or for electricity transmission equipment. (Mathieu Bion)