Alstom to Lower Price of Energy Assets in Sale to GE

By Nick Kostov And Ted Mann 

PARIS-- Alstom SA said Monday it would lower the price for the sale of most of its energy assets to General Electric Co. as it seeks to support concessions the two companies are working on to win European Union approval for the deal.

GE submitted concessions this month to European regulators, who have challenged the Alstom acquisition on the grounds that it would hamper competition for heavy-duty gas turbines on the Continent. Regulators will decide by Sept. 11 whether to let the Alstom deal go through.

"Alstom's board of directors has unanimously accepted that the group would contribute financially to [ a ] remedy package," Alstom said. The company said it would reduce the sale price by EUR300 million ($329.5 million) from the original EUR12.35 billion purchase price.

The EUR300 million euro adjustment to the purchase price is the first indication of the scale of the concessions GE has offered to win approval in Brussels. The reduction reflects the value of an as-yet unspecified remedy that GE has offered to regulators in hopes of salvaging the deal.

The European Commission is testing the effects of the proposed remedy with utility customers in Europe, a person familiar with the matter said.

GE hasn't said what remedies it has offered regulators, but Chief Executive Jeff Immelt has told investors he would be willing to give up some intellectual property it stands to acquire from Alstom in order to win approval. Mr. Immelt has also said GE can't accept any remedies that reduce its take from servicing Alstom's fleet of power turbines in Europe.

"We can confirm that there has been an adjustment of EUR300 million to the purchase price," GE spokesman Seth Martin said in an email. "This is part of an agreement related to the remedies proposed to the EC. The purchase price adjustment only applies if the EC approves the remedy proposal."

Both companies have been working to secure competition and regulatory authorizations since the deal was announced last year. In June, Europe's top competition regulator sent GE a formal list of concerns relating to its proposed acquisition of Alstom's power business.

GE has repeatedly said that it wouldn't push ahead with the acquisition at any price and has tried to convince regulators that their concerns were misplaced.

The parties will continue to pursue the approval processes with the objective of closing the transaction as soon as possible within the coming months, Alstom said.

Write to Nick Kostov at [e-mail] and Ted Mann at [e-mail]

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