More M&A Action: GE-LM Wind Power Merger Gets OK From EU

Posted by Betsy Lillian on March 20, 2017 No Comments
Categories : New & Noteworthy

Concluding that the merged entity would continue to face “effective competition” in Europe, the European Commission has approved GE’s acquisition of Danish wind blade manufacturer LM Wind Power.

The commission says its investigation focused on the effect of the transaction on the upstream market for the manufacture and supply of wind turbine blades, as well on the downstream markets for the manufacture and supply of onshore and offshore wind turbines.

According to the commission, GE has a relatively small market share in both onshore and offshore wind turbines, and although LM Wind Power has a significant market share, its market position has been decreasing in the past few years.

Based on the results of its market investigation, the commission has concluded that competitive concerns would be unlikely to arise after the transaction because GE would not be in a position to significantly affect the upstream market – particularly because competing blade manufacturers would continue to have access to wind turbine manufacturers other than GE. In addition, in relation to the downstream markets, GE would continue to face significant competition from other major turbine manufacturers, such as Siemens, Vestas, Nordex and Senvion, which either manufacture their blades in-house and/or are not dependent on LM Wind Power for supplies.

Last October, GE announced its intent to purchase LM Wind Power for $1.65 billion. Since 2001, LM Wind Power has been owned by Doughty Hanson, a London-based private equity firm. The merger transaction was notified to the European Commission on Feb. 13.

Following the closing of the deal, GE intends to operate LM Wind Power as a stand-alone unit within GE Renewable Energy. GE will also retain the ability to source blades from other suppliers. LM Wind Power will continue to be led by its existing management team and be headquartered in Denmark.

Notably, last week, the European Commission also OK’d the merger of Siemens and Gamesa.

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