By Ted Mann
General Electric Co. said it is willing to make concessions to
win European regulatory approval of its $17 billion deal for Alstom
SA's power business.
The deal, announced more than a year ago, remains under review,
and GE power and water chief Steve Bolze said the long regulatory
process is taking a toll on the French company's business.
"We are willing to explore remedies to get this deal done," Mr.
Bolze said in an interview. He noted that any concession must
preserve the deal's value and that the long path to approval is
creating "uncertainty with employees and customers" of Alstom.
The comments came as the early August deadline for regulatory
approval slid even further after European Commission officials held
up their review for the last two weeks after requesting additional
information about the transaction from GE and Alstom.
Once the information is received a new deadline will be set, a
spokesman for the European Commission said in a statement. A GE
spokesman said the company expected the deal review to resume this
week.
GE agreed to purchase Alstom's energy assets last spring in a
deal that if completed would be GE's largest-ever acquisition. The
deal, a major part of GE CEO Jeff Immelt's strategy to return the
conglomerate to its industrial roots, got embroiled in French
politics when it became public last year. To win France's blessing,
GE had to promise to create French jobs and partner with the French
government in a number of joint-ventures.
Alstom has already won shareholder approval for the deal, and
the company is planning its future as a rail transportation
business. Meanwhile, the energy business GE is buying is facing
falling sales and profits. Last year, orders fell 12%, and sales
declined 7%, according to an Alstom presentation.
GE executives are pressing the case that GE's ownership of
Alstom's gas turbine business would have little effect in Europe.
They argue the market for heavy-duty gas turbines is a global one,
with only 5% of demand in Europe.
Regulators are examining whether the deal would have
anticompetitive effects, since GE's purchase of Alstom would reduce
the number of European suppliers of new turbines from three to two,
also including Siemens AG. Siemens sought to thwart the deal last
year, pairing with Mitsubishi Heavy Industries Ltd. to make an
offer of its own to purchase the Alstom assets.
In recent months, Mr. Immelt has assured investors that GE has a
strong record for completing deals in Europe, but also warned that
the company wouldn't do the deal at any price. "Just like every
other deal we've ever done," he said on a conference call in April,
"if this one ever would become unattractive, we wouldn't do
it."
Tom Fairless contributed to this article.
Write to Ted Mann at ted.mann@wsj.com
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