Alstom, GE test stamina in showdown with EU over energy deal

GE’s purchase of most of Alstom’s energy operations holds a special significance as the US company seeks to retreat from lending activities and return to its manufacturing roots.

Bloomberg/BrusselsThe attempt by General Electric Co and Alstom to convince the European Union to clear a planned combination of their energy businesses has been a gruelling effort. It’s not over.The duo confronted European Commission officials at a Brussels hearing yesterday, seeking to win over regulators who argue the €12.4bn ($13.7bn) deal would leave only Siemens as GE’s main rival in Europe in the gas turbines market — potentially thwarting innovation and triggering price rises.Patrick Kron, the chief executive officer of France’s Alstom, said this week he’s “very confident” the companies can get EU approval. But after holding around 50 meetings with regulators and handing over 50,000 pages of written arguments, he owned up to a sense of fatigue over the process.“I find it all very long, very hard to go through from a human standpoint, for teams — and from a financial and commercial standpoint,” Kron said on Tuesday at Alstom’s annual general meeting near Paris.GE’s purchase of most of Alstom’s energy operations holds a special significance as the US company seeks to retreat from lending activities and return to its manufacturing roots. Fairfield, Connecticut-based GE is selling about $200bn of assets as it shrinks the finance arm and refocuses on manufacturing units making heavy-duty products such as gas turbines, jet engines and medical scanners.The French manufacturing firm is keen to get the deal through for different reasons.Alstom had a net loss of €719mn in the fiscal year ended March 2015 as it got a €720mn fine to settle a bribery probe in the US Its earnings were also hit by a drop in energy equipment sales, restructuring charges and the writedown of some Russian assets, while income from operations at Alstom’s train-making business climbed 19%.“If the deal were to be up in the air, we would be in a very difficult situation,” Kron said. “But there is no reason to think that will be the case.”The hearing will be an opportunity “to provide explanations” and address the list of competition concerns sent by the commission last month, said Kron. The commission, GE and Alstom all declined to comment on the hearing.GE is seeking to avoid a repeat of its failed bid for Honeywell International, which was scuttled by EU regulators in 2001.While GE has a history of regulatory tussles with the EU, the company faces US government opposition to another of its deals — the $3.3bn sale of its appliance business to Electrolux. The Swedish company agreed in September to acquire the century-old GE unit in a transaction that would put the company on par with industry leader Whirlpool Corp in the US