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GE faces probe for misleading EU over $1.7 billion deal  

Credit:  By Gaspard Sebag and Peter Levring | Bloomberg | May 22, 2017 | www.bloomberg.com ~~

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.

The European Commission opened proceedings on March 9 to review whether GE misled EU officials examining a deal to buy LM Wind Power, a maker of wind-turbine blades, for 1.5 billion euros ($1.7 billion), the Boston-based company said in an emailed statement on Monday.

Since then, there has been “no further formal communication” from the commission to GE and the EU regulator cleared the deal on March 20, GE said. The probe is at a preliminary stage, according to a person familiar with the matter.

GE 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 another person, who asked not to be named as the case is confidential. 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.

‘No Excuse’

“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.”

If the EU considers it has enough evidence against GE, the next procedural step would be to state its case in a so-called statement of objections, which could take months to be put together. Such documents are often a precursor to fines. 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.

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 second person said. The punishment for breaking the EU’s rules is as high as 1 percent 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.

Source:  By Gaspard Sebag and Peter Levring | Bloomberg | May 22, 2017 | www.bloomberg.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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