General Electric Company (NYSE:GE) has one week to offer concessions with regards to EU regulatory concerns.
The company has been given a one-week window to come up with a solution that will satisfy the EU Regulatory Commission with regards to the 12.4-billion-euro ($13.7 billion) acquisition of Alstom’s power unit. The situation arose after Alstom selected GE’s as the best to acquire the power unit.
The unit opens up numerous opportunities for General Electric and acquiring it would be very advantageous for the company. It would also be in line with the firm’s decision to place all its focus on its core business. However, the EU Commission has different views. The commission raised antitrust issues citing that the acquiring the unit would give General Electric an unfair advantage over the competition. GE together with Siemens AG (ADR) (OTCMKTS:SIEGY) would thus dominate the market.
General Electric is now facing a huge burden because the commission might hinder the acquisition from going through. Last week, the two parties held a closed-door meeting to discuss the situation. It is not clear whether GE managed to convince the Commission that the acquisition will not hurt the competition. An anonymous source revealed that the company has been given until July 6 to come up with solutions.
The EU Commission will give its final decision as to whether the deal making process should go on by August 21. General Electric CEO Jeff Immelt claims that the company is willing to transfer its intellectual property rights to some of Alstom’s assets. Some industry analysts claim that the company has to do more so as to comply with the regulations.
The company views the EU commission as very demanding, mainly because it is the only regulator that is demanding concessions. Other regulators from various regions including South Africa, China, India, Brazil and 11 other countries have already approved the deal without asking for concessions. General Electric Company (NYSE:GE) has not revealed any statement about the small time frame that it has been given to come up with solutions for the problem.
