Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC investigating Siemens’ proposed acquisition of Dresser-Rand Group, (Feb 13, 2015)

By Greg Hammond, J.D.

The European Commission is opening an investigation of Siemens AG’s proposed acquisition of rotating equipment manufacturer Dresser-Rand Group, Inc. The EC is concerned that the proposed merger will cause anticompetitive effects in the market for aero-derivative gas turbine drivers, turbo compressors, and turbo-compressor trains, as the number of main competitors will reduce from three to two in all of these markets, the EC announced today.

Siemens and Dresser-Rand are both suppliers of turbo compressors, aero-derivative gas turbines, industrial gas turbines, steam turbines, and electric motors. The EC’s initial market investigation revealed that there are only three main suppliers of these products—Siemens, General Electric, and Dresser-Rand. A merger between Siemens and Dresser-Rand could therefore cause less product variety and higher prices. The initial investigation also indicated that the merger could lead to less product variety and higher prices for small steam turbines of less than 5 MW.

The EC was notified of the proposed acquisition on January 9, 2015. It now has until June 30, 2015 to make a decision on whether the merger would be in line with EU Merger Regulation. Despite the EC’s investigation, Dresser-Rand expects the transaction to close in the summer of 2015 or sooner, noting that the acquisition has already received regulatory approval in the United States, Brazil, Canada, Russia, and South Korea.

Companies: Dresser-Rand Group, Inc.; Siemens AG

News: AcquisitionsMergers Antitrust