Antitrust Law Daily Wrap Up, ANTITRUST NEWS: GE's acquisition of Avio aviation business conditionally approved by European Commission, (Jul 2, 2013)
Organizations Mentioned:Avio S.p.A. | General Electric | General Electric Co. | United Technologies Corp.
By Jeffrey May, J.D.
The European Commission (EC) announced today that it has conditionally cleared General Electric Company's proposed acquisition of the aviation business of Avio S.p.A. of Italy. GE announced last December that it was buying Avio from Cinven, a leading European private equity firm, for around $4.3 billion.
GE's aviation unit provides jet, turboshaft, and turboprop engines, components and integrated systems for commercial, military, business, and general aviation aircraft. Avio is a global aerospace manufacturer and service provider. It provides components for GE's aviation unit and other engine companies.
The EC was concerned that the transaction, as originally proposed, would have allowed GE to acquire a significant degree of influence in the Eurojet consortium, which manufactures the engine for the Eurofighter for European nations. GE also might have been able to access strategic information of one of its main competitors in the international market for fighter aircraft as a result of the deal. GE could have been in a position to prevent the Eurofighter from offering an alternative to GE-powered platforms.
To resolve the EC’s concerns about the competitive position of the Eurojet consortium, GE agreed to a series of commitments to ensure that the Eurojet consortium's strategic information is properly protected and that Eurojet and Eurofighter can continue to participate in future campaigns for export sales, according to the EC. As modified, the transaction no longer raises competition concerns, the EC concluded.
The EC also noted that the acquisition did not raise competition concerns in the markets for some key components sold by Avio to GE's competitors in aircraft engine markets, such as Pratt & Whitney, part of United Technologies Corp., and Rolls-Royce.
The EC said that it worked in close cooperation with the FTC in its investigation.
Companies: Avio S.p.A.; General Electric Co.
News: Antitrust