GE Fined EUR 52M Over Inaccurate Info During LM Wind Takeover

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The European Commission has fined General Electric EUR 52 million for allegedly providing incorrect information during the commission’s investigation under the EU merger regulation of GE’s planned acquisition of LM Wind Power.

“Our merger assessment and decision-making can only be as good as the information that we obtain to support it. Accurate information is essential for the commission to take competition decisions in full knowledge of the facts,” says Commissioner Margrethe Vestager, who is in charge of competition policy.

On Jan. 11, 2017, GE notified its proposed acquisition of LM Wind. In this notification, GE stated that it did not have any higher-output wind turbine for offshore applications in development beyond its existing 6 MW turbine. However, through information collected from a third party, the commission found that GE was simultaneously offering a 12 MW offshore wind turbine to potential customers.

As a result, on Feb. 2, 2017, GE withdrew its notification of the acquisition of LM Wind. On Feb. 13, 2017, GE re-notified the same transaction, this time including complete information on its future project, says the commission, which approved the acquisition on March 20, 2017. GE completed the $1.65 billion takeover a month later.

On July 6, 2017, the commission addressed a statement of objections to GE alleging that it had breached its procedural obligations under the merger regulation.

The commission’s investigation has confirmed that, contrary to GE’s statements in its first notification in January 2017, GE had indeed been offering a higher-output offshore wind turbine to potential customers, the commission claims. As a result, GE’s statement in the notification form that it had no higher-output wind turbines for offshore in development is incorrect.

This decision has no impact on the commission’s approval of the transaction under EU merger rules, as this was based on rectified information from the second notification.

According to the merger regulation, the commission can impose fines of up to 1% of the aggregated turnover of companies that intentionally or negligently provide incorrect or misleading information.

The commission says GE committed an infringement by negligently providing incorrect information in the merger notification form. The commission considers this infringement serious because it prevented it from having all relevant information for the assessment of the transaction. Moreover, the commission considers that GE – with whom it had continuous contacts during the merger review process, especially on the subject of GE’s pipeline products in this market – should have been aware of the relevance of the information for the commission’s assessment.

On the basis of these factors, the commission has concluded that an overall fine of EUR 52 million is both “deterrent and proportionate.

GE has issued the following statement in response to the fine:

“We have been notified of the adoption of the EC decision, and we are reviewing it in detail before determining our next actions.”

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