By Tom Fairless
BRUSSELS--European Union authorities have extended by a month
their investigation into General Electric Co.'s $17 billion
acquisition of France-based Alstom SA's energy businesses, amid a
disagreement over the geographical scope of the large-gas-turbine
market.
The delay highlights the uncertainty around GE's biggest deal to
date, a rare example of a large French company being acquired by a
U.S. rival.
In a statement posted online, the European Commission, the
bloc's top antitrust authority, said that it had extended the
deadline for its investigation by 20 working days--to August 6.
GE Chief Executive Jeff Immelt told investors in December that
the company was aiming to close the Alstom deal by July 1.
EU regulators opened the in-depth investigation three weeks ago
to assess whether the proposed deal could lead to higher prices for
large gas turbines.
The commission said that while four large companies competed
globally to produce heavy-duty gas turbines--GE, Alstom, Siemens
and Mitsubishi Hitachi Power Systems--Mitsubishi seemed to be less
active in Europe than in the rest of the world.
If the regulator decides that the market is indeed European
rather than global, the merger would leave only two strong
competitors. In such cases, the regulator would typically block the
deal or demand strong remedies, such as asset sales.
In a statement, GE said that it had agreed with the commission
to extend the deadline by 20 days.
"We have a constructive dialogue with the commission and we
continue to work toward a positive outcome," a spokesman for the
company said.
Speaking last week about current merger cases, EU antitrust
chief Margrethe Vestager said that she wasn't convinced by
arguments that the commission should "look at worldwide
markets."
"The argument goes that we need to protect companies, to help
them become bigger companies, otherwise they can't take on
international rivals,"she said in a speech in Brussels.
"I'm not convinced about these arguments," she added. "[Mergers]
should not happen at the expense of consumers."
Under EU rules, merging parties are allowed to request that up
to 20 additional days be added to the timeline of in-depth probes,
provided that they do so within 15 working days of the launch of
the investigation.
"They've decided to use it all," said Anne MacGregor, an
antitrust lawyer with Cadwalader, Wickersham & Taft LLP in
Brussels. "Probably there is a lot of economic analysis going on
behind the scenes."
Write to Tom Fairless at tom.fairless@wsj.com
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