General Electric Co. offered to sell gas- turbine assets to an Italian rival in an attempt to win European Union approval for its plan to buy most of Alstom SA’s energy business, four people familiar with the situation said.
GE this month told EU watchdogs it’s willing to offload some of Alstom’s sale and servicing activities to Ansaldo Energia SpA, said the people, who asked not to be named because the matter is confidential. The American company has also offered to sell some some intellectual property around Alstom products to the Italian firm, the people said.
Getting access to Alstom’s installed base of large and very large turbines will be key for Ansaldo to become a viable competitive force — allowing it to benefit from the French company’s client list and its profitable servicing business, two of the people said. As part of GE’s offer to the EU, Ansaldo could also buy Alstom’s Power Systems Manufacturing unit which can service all gas turbines, they said.
The offer is an opening gambit after months of talks with regulators, who are concerned that the GE-Alstom tie-up would lead to higher prices and less customer choice. Alstom said Monday it agreed to take 2.4 percent less for its energy business than GE’s original 12.35 billion euro ($13.7 billion) bid to help the Fairfield, Connecticut-based company craft a compromise to satisfy the EU.
The European Commission’s backing is key for GE, which saw its purchase of U.S. rival Honeywell International Inc. scuttled by the bloc’s regulator in 2001. The Brussels-based regulator has set a Sept. 11 deadline to rule on the Alstom deal.
Representatives for the commission, GE, Alstom and Ansaldo declined to comment.
The commission has argued the Alstom deal would leave only Siemens AG as GE’s main rival in Europe in the market for gas turbines used in gas-fired power plants — potentially thwarting innovation and triggering price rises.
GE chief executive officer Jeffrey Immelt already said in May that the company was considering selling some intellectual property around Alstom products.