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European Commission - Press release

Mergers: Commission clears GE's acquisition of Alstom's power generation and transmission assets, subject to conditions

Strasbourg, 8 September 2015

Following an in-depth review, the Commission has approved the acquisition of Alstom's energy businesses by General Electric subject to divestment of central parts of Alstom's heavy duty gas turbines business to Ansaldo.

Following an in-depth review, the Commission has approved under the EU Merger Regulation the proposed acquisition of the energy businesses of Alstom of France by US-based General Electric ('GE').

The approval is conditional upon the divestiture of central parts of Alstom's heavy duty gas turbines business to Ansaldo of Italy. Heavy duty gas turbines are mainly used in gas-fired power plants. The Commission 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.

Concerning the other businesses that are part of the transaction, namely the thermal power generation businesses (other than gas), grid and renewables, the Commission did not identify any competition concerns essentially because the activities of the two companies are complementary and do not overlap.

Commissioner Margrethe Vestager, in charge of competition policy, said: "I am glad that we can approve this transaction, which shows that Europe is open for business and that Europe-based technology can thrive and attract foreign investment.

We have had a very close and successful cooperation with the Antitrust Division of the US Department of Justice both as regards the investigation and the analysis of suitable remedies.

Divestment of Alstom's key technology to produce heavy duty gas turbines to Ansaldo will ensure that European business and consumers continue to benefit from this innovation and know how.

Furthermore, advanced heavy duty gas turbine technology is crucial to face the challenges of climate change and modernising our energy supply. It is the most efficient, cleanest and flexible fossil fuel power generation technology and an important complement to more unpredictable generation from renewables - when the wind stops blowing it is mostly flexible gas-fired plants that can step in."


The Commission's investigation

Heavy duty gas turbines operate on either of two frequencies 50 Hz and 60 Hz, and can be further differentiated according to power output - medium, large and very large. In the European Economic Area (EEA) all heavy duty gas turbines operate at the 50 Hz frequency. The Commission's in-depth investigation therefore focused on the markets for the sale and servicing of heavy duty gas turbines operating at 50 Hz, where Alstom competes directly with GE in the EEA.

The market for heavy duty gas turbines is concentrated with only four globally active full technology competitors: market leader GE, number two Siemens, Alstom and Mitsubishi Hitachi Power Systems (MHPS). This is due to the large upfront investments in R&D, testing and manufacturing required, setting very high technological and financial barriers to enter the market. The fifth player, Ansaldo, has more limited R&D capabilities, a narrower product range and a more limited geographic reach.

The merged entity would account for more than 50% of the EEA market for heavy duty gas turbines and also very high market shares on the worldwide market for 50 Hz frequency heavy duty gas turbines. In fact, in the EEA, the transaction as notified:

  • would have brought together two of the three main competitors:

Alstom with its GT 26 (large) and GT 36 (very large) turbines is active in both large and very large heavy duty gas turbines segments, which are the technologically most advanced. This makes it a significant and close competitor of GE and Siemens both from a technological and commercial point of view, especially in the EEA, where operational flexibility provided by such turbines is very important to customers. MHPS on the other hand is a more distant competitor because of its different technological focus and because it is less active in the EEA. An economic analysis of bids for heavy duty gas turbine tenders over the last five years confirmed significant competitive interaction between the bids by GE and Alstom and indicated a risk of price rises;

  • would have risked eliminating an important innovator:

Alstom's heavy duty gas turbine technology is one of the most advanced, flexible and cleanest available, particularly well-suited to meet European customers' requirements for operational flexibility. The transaction as notified would have reduced customer choice, R&D and innovation, with serious risks that certain Alstom heavy duty gas turbine models would be discontinued and that the newly developed and most advanced model (GT 36) would not be commercialised. This was of concern for many market participants, including major European power utilities.

  • would have eliminated competition from Alstom's servicing subsidiary Power System Manufacturing (PSM) for the servicing of GE's mature technology heavy duty gas turbines (in particular GE's 9FA model) installed in existing plants. As GE is the dominant player in this market and PSM its most significant potential competitor, this would have created a risk of higher prices and less innovation.

The commitments

In order to address the Commission's concerns, the parties offered to divest the main, technologically most advanced parts of Alstom's heavy duty gas turbine business and key personnel for its further development. In particular:

  • Alstom's heavy duty gas turbine technology for the GT 26 and GT 36 turbines, existing upgrades and pipeline technology for future upgrades, excluding essentially only the technology for Alstom's older GT 13 model for which the Commission had no competition concerns;
  • a large number of Alstom R&D engineers who will continue to develop the Alstom heavy duty gas turbine technology;
  • the two test facilities for the GT 26 and GT 36 turbine models in Birr, Switzerland;
  • long term servicing agreements for 34 GT 26 turbines already sold in recent years by Alstom; and
  • Alstom's PSM servicing business based in Florida, US.


GE proposed Ansaldo of Italy as a potential purchaser for these assets. Ansaldo is an existing competitor in the heavy duty gas turbine market. It already has know-how, experience and an efficient factory for gas turbines and other power plant components (such as steam turbines and generators) that are often sold together with heavy duty gas turbines.

The commitments offered by GE will allow the purchaser to replicate Alstom's previous role in the market thereby maintaining effective competition. Moreover, the divestment guarantees the continuation of Alstom's distinctive dual combustion heavy duty gas turbine technology, which is particularly well suited for the needs of European customers, while at the same time offering the purchaser advanced R&D capabilities and incentives to continue pushing innovation on this important market for Europe.

GE can only implement the acquisition of Alstom once the Commission has formally assessed and approved the finalised divestiture to Ansaldo.

For the above reasons and subject to these conditions, the Commission was able to approve the transaction under the EU Merger Regulation.

International co-operation

Given the complexity of the case and the global reach of the parties' activities, the Commission co-operated with the competition authorities of a significant number of countries. This involved in particular close and successful co-operation with the Antitrust Division of the Department of Justice (DoJ) in the US. While the scope of the DoJ's concerns was different due to different conditions in the US markets for heavy duty gas turbines (operating at 60 Hz), the co-operation involved regular exchanges of views and evidence and a joint approach to remedy discussions leading to satisfactory and mutually aligned remedy solutions for both EU and US concerns.

The Commission has cooperated throughout the procedure also with agencies in Brazil, Canada, China, Israel and South Africa.


Heavy duty gas turbine market

The International Energy Agency (IEA) forecasts that gas is expected to continue to be a significant source of electricity generation in Europe in the medium term and to grow further in the long term. Modern heavy duty gas turbine technology is very research and capital intensive. Moreover, flexible and efficient heavy duty gas turbine technology will continue to be essential for creating a more climate friendly electricity generation system in Europe:

  • it is complementary to renewables (ability to come on stream almost instantaneously to meet temporary supply shortfalls from renewable source generation); and
  • it is the most environmentally-friendly fossil fuel generation technology (efficient and low emissions).

This is why EU funds under the Research and Technological Development Framework Programme are dedicated to heavy duty gas turbine research (see further here).

Companies and products

General Electric is a US multinational conglomerate company. The company operates through the following business departments: Power and Water, Oil and Gas, Energy Management, Aviation, Healthcare, Transportation and Capital.

Alstom is a French multinational company active in electricity generation and rail transport markets.

Merger rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

In addition to this investigation, there are currently five other in-depth merger investigations:

More information on this case is available on the Commission's competition website, in the public case register under the case number M.7278.


Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email

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