Source: LM Wind Power
Industryweek 21778 Lmwindpower Ge
Industryweek 21778 Lmwindpower Ge
Industryweek 21778 Lmwindpower Ge
Industryweek 21778 Lmwindpower Ge
Industryweek 21778 Lmwindpower Ge

GE Said to Face Probe for Misleading EU Over $1.7 Billion Deal

May 22, 2017
The company may be in trouble for telling regulators it didn’t have any plans to develop a new giant offshore wind turbine when the company did have such a project on hold.

General Electric Co. is the latest U.S. company to be investigated by European Union for possibly turning in misleading information during a merger review, according to two people familiar with the GE case.

The European Commission is reviewing whether GE (IW 500/6) misled EU officials examining a deal to buy LM Wind Power, a maker of wind-turbine blades, for 1.5 billion euros (US$1.7 billion), said the people, who asked not to be named as the case is confidential.

The company may be in trouble for telling regulators it didn’t have any plans to develop a new giant offshore wind turbine when the company did have such a project on hold, said one of the people. The EU began to suspect it had been misled shortly after giving its stamp of approval to the deal in March and GE is now scrambling to explain that there was no intention to misinform regulators, the person said.

EU Competition Commissioner Margrethe Vestager signaled a zero tolerance approach to companies that give inaccurate information when she fined Facebook Inc. 110 million euros on May 18 for combining WhatsApp data with its other services after having told the merger officials otherwise during the EU’s 2014 review. The social network said it acted in good faith and won a lower fine after cooperating with regulators.

“It’s no excuse that the closed circle of people working on a merger didn’t know what was going on elsewhere at the company,” Vestager told Bloomberg on May 19 in a general response to questions about the EU’s crackdown on merger cases. “That simply doesn’t hold up,” she said, adding that companies “need to be thorough.”

GE and the European Commission in Brussels both declined to comment on the GE probe.

GE’s push into the wind industry comes after the Boston-based firm took over Alstom Renewable Power Sector as part of its $10 billion acquisition of Alstom SA’s power operations two years ago. GE renamed the unit, which produces 6MW offshore wind turbines, GE Renewable Energy.

On March 20, the EU approved GE’s acquisition of Denmark-based LM Wind Power unconditionally after officials found no competition concerns.

At First, No Competition Concerns

But while GE told the commission during the review that it wasn’t planning to expand into next-generation offshore wind turbines with a capacity of 12MW, EU regulators subsequently said they found evidence to the contrary, the person said. The punishment for breaking the EU’s rules is as high as 1% of their annual sales.

The probe into possible misleading information may lead to a statement of objections around the EU’s summer break in August and subsequent fines, the person said.

In addition to any fine, the case could hurt GE’s relationship with EU regulators as they review its other merger plans and investigate its maintenance contracts for aircraft engines. Last month, GE filed for EU approval its plan to combine its oil and gas business with Baker Hughes Inc.

By Gaspard Sebag and Peter Levring

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!