General Electric (GE) is expected to secure EU approval for its proposed 12.4-billion-euro ($13.8 billion) bid for French peer Alstom’s power business, its largest ever deal, two people familiar with the matter said on Friday.
The green light from the European Commission will come 14 years after it rejected General Electric’s (GE) attempt at a $42 billion takeover of Honeywell International, despite clearance by U.S. authorities.
The EU veto resulted in a barrage of criticism from U.S. officials, including U.S. President George W. Bush. The current deal has the backing of the French state, which will buy up to 20 percent of Alstom from construction group Bouygues once the GE bid is cleared.
The U.S. conglomerate, which offered concessions to head off the Commission’s worries about the deal a month ago, improved its package last week.
“GE is likely to get approval,” one of the sources said.
The second source said GE had originally offered to divest some manufacturing and services activities and research and development units around the world, including a facility in Switzerland and Alstom’s Power Systems Manufacturing operation.
It was not clear what changes GE had made to improve its offer.
GE shares doubled their gains after the Reuters story.
The people said Italian company Ansaldo Energia, which is 40 percent owned by Italian state-backed investment fund Fondo Strategico Italiano and another 40 percent by China’s Shanghai Electric, was seen as the preferred buyer for the assets.
Commission spokesman Ricardo Cardoso and Alstom declined to comment. The Commission has set a Sept. 11 deadline for its decision.
GE spokesman Jim Healy said: “We submitted a remedy package that addresses the Commission’s concerns and preserves the economic rationale of the deal.”
The EU antitrust authority in June warned of the reduced competition in Europe resulting from the deal as GE’s only rival would be Germany’s Siemens, with Ansaldo seen as a niche player. A third global rival would be Mitsubishi Hitachi Power Systems.
($1 = 0.8998 euros)