Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS—D.D.C.: U.S. conditions on GE acquisition of Alstom assets approved, (Dec 30, 2015)

By Jeffrey May, J.D.

The federal district court in Washington, D.C. has approved a U.S. consent decree imposing conditions on General Electric Company's acquisition of the power-related businesses of Alstom, S.A. In order to resolve Department of Justice Antitrust Division concerns that the transaction would substantially lessen competition in the development, manufacture, and sale of aftermarket parts and service for a specific type of gas turbines used for power generation in the United States, General Electric (GE) was required under the terms the consent decree to divest Alstom's wholly owned subsidiary Power Systems Mfg., LLC (PSM) (U.S. v. General Electric Co., December 21, 2015, Jackson, A.).

The divestiture of PSM to a U.S.-approved buyer was intended to resolve concerns over the combination of the primary competitors in the aftermarket sale of parts and services for the most common gas turbine used for power generation—GE 7FA gas turbines. Within this market, GE and PSM had market shares of 83 and nine percent respectively, according to the government’s September complaint. It was alleged that, without the divestiture, the loss of competition resulting from the acquisition likely would have given GE the ability to raise prices, lessen innovation, and lower the quality of service for customers in the United States.

Extension of divestiture period. The parties have until January 27, 2016, to divest the assets identified in the consent decree. The divestiture assets include PSM's facilities in Jupiter, Florida, and Missouri City, Texas, and all of the tangible and intangible assets primarily used in or for the business. The Justice Department permitted a 30-day extension of the time deadline outlined in the settlement on December 22.

The case is No. 1:15-cv-01460-ABJ.

Attorneys: James K. Foster, Jr. and Kerrie Freeborn for U.S. Department of Justice. Jonathan Ian Gleklen (Arnold & Porter LLP) for General Electric Co. Janet L. McDavid (Hogan Lovells US LLP) for Alstom SA and Power Systems MFG., LLC.

Companies: General Electric Co.; Alstom SA; Power Systems MFG., LLC

Cases: AcquisitionsMergers Antitrust AntitrustDivisionNews DistrictofColumbiaNews