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ALSTOM

EU probes GE’s €12bn purchase of Alstom

EU competition regulators launched Monday a probe into US group General Electric's planned €12.4-billion ($14.1-billion) acquisition of the energy business of French rival Alstom.

EU probes GE's €12bn purchase of Alstom
The EU will probe the €12 billion deal between General Electric and France's Alstom. Photo: AFP

The European Commission said the deal would eliminate one of the three main competitors to GE in the market for heavy-duty gas turbines, potentially affecting customers in the 28-nation bloc.

"We are concerned that the proposed acquisition might not only lead to higher prices but also result in less choice for customers and less innovation in the sector," EU Competition Commissioner Margrethe Vestager said in a statement.

"Technology is and will continue to be crucial to help Europe meet its environmental commitments. Therefore, it is essential to maintain competition in the heavy-duty gas turbines market."

GE beat off fierce competition from German rival Siemens last year to seal the deal but then had to accept a working partnership with the French government in Alstom's associated nuclear, steam turbine, offshore wind and hydro power businesses.

It also had to hand over its train signalling operation to Alstom's high-speed rail unit, famous for its TGV trains, which will become the new core business of Alstom.

The French government demanded the concessions in response to a public outcry that one of the country's prized industrial giants would fall completely into foreign hands, costing jobs and damaging national prestige.

Under EU rules the Commission, the European Union's executive branch, has 90 working days, or until July 8 to make a final decision.

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GE

US giant GE to pay France €50 million after creating just 25 jobs out of 1,000

The French government announced Tuesday that US industrial conglomerate General Electric will pay €50 million ($57 million) after falling short of its goal of creating 1,000 new jobs in the country.

US giant GE to pay France €50 million after creating just 25 jobs out of 1,000
Alstom employees protest in front of the France's Ministry of Finance in Paris. Photo: AFP

GE had pledged to create the jobs by the end of last year as part of its 2015 purchase of the power and electrical grid businesses of France's Alstom.

But shortly after closing the deal GE unveiled a series of job cuts across Europe as slumping oil and gas prices crimped demand for its heavy-duty turbines and other equipment.

The company had already warned last year that it wouldn't meet the target, though the new CEO Larry Culp confirmed in October that GE would “fulfil its commitments.”

It had promised to pay €50,000 for every job not created over the three-year period.

The French finance ministry said after a meeting with GE officials Tuesday that the firm had created just 25 new jobs overall, meaning it would pay €50 million into an industrial development fund.

“GE underscored the significant of its continual investments in France during the period, and noted that despite the particularly difficult business climate, the group had done its utmost to create jobs,” the company said in a statement.

It pointed to a $330 million investment in offshore wind turbines in France announced last year, which it expects to eventually create 550 new jobs.

But union sources said last month that GE was planning to cut nearly 470 jobs, at its Alstom Power Systems GE Energy Power Conversion units.

Under Culp the company has been trying to get its power operations on more solid financial footing, with plans to cut costs further and reduce debt.

Last week it posted a $574 million profit for the fourth quarter, a welcome turnaround from the $11 billion loss a year earlier. 

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