NERA’s Role in GE’s Acquisition of Alstom’s Power Business

The Situation

In 2014, General Electric, the world’s largest manufacturer of heavy-duty gas turbines, reached an agreement to acquire the energy businesses of Alstom, a French multinational company active in electricity generation and rail transport markets. The European Commission raised concerns that this transaction would reduce competition, leading to higher prices for gas turbines in Europe.  

NERA's Role

NERA experts Prof. Dr. Frank Maier-Rigaud and Dr. Christopher Milde were retained in 2014 to consult on the case. Their work included developing economic analyses applicable to jurisdictions worldwide and specific to the context of the European Commission’s investigation, and to review and validate analysis conducted by the economic consulting firm working for General Electric. The analysis in particular was concerned with assembling a suitable bidding data set on gas turbine projects and the analysis and discussion of the conclusions that could be drawn from this data set.

The Result

In September 2015, the European Commission approved the acquisition and the US Department of Justice filed a proposed consent decree that would permit the acquisition to close in the fourth quarter. As part of the settlement, GE agreed to divest central parts of Alstom’s heavy duty gas turbine business. In a statement issued by the European Commission, Commissioner Margrethe Vestager said, “Europe’s power generators will continue to be able to choose between a competitive selection of advanced, innovative and efficient gas turbines when building power stations and when selecting whom to service their existing gas turbines. And in turn, European consumers and businesses should enjoy cheaper and cleaner electricity.”