GE In Hot Water over LM Wind Power Takeover
The European Commission has sent a Statement of Objections to General Electric (GE) alleging the company breached EU merger rules by providing incorrect or misleading information in connection to the takeover of LM Wind Power.
In the Statement of Objections, the Commission has informed GE of its preliminary conclusion that the company provided incorrect or misleading information during the Commission’s investigation of GE’s planned acquisition of LM Wind Power.
GE failed to provide information to the Commission concerning its research and development activities and the development of a specific product, the Commission said. The product in question was reported to be a next generation turbine with a capacity of 12MW.
The missing information had consequences not only for the Commission’s assessment of GE’s acquisition of LM Wind but also for the assessment of Siemens’ acquisition of Gamesa, according to the authority.
This was a separate transaction in the wind turbine market, which was investigated by the Commission at the same time. The information was necessary to properly assess, in both cases, the future position of GE and the competitive landscape on the markets for wind turbines.
On 2 February 2017, GE withdrew its notification of the merger with LM Wind. On 13 February 2017 GE re-notified the same transaction. This second notification included the information on the future project, which had not been in the original one. This allowed the Commission to have a full picture of the wind turbines market.
The Commission cleared the re-notified GE – LM Wind transaction on 20 March 2017 and the Siemens – Gamesa transaction on 13 March 2017, in both cases without requiring commitments.
If the Commission were to conclude that GE intentionally or negligently supplied incorrect or misleading information by not informing the Commission of all relevant product developments, it could impose a fine of up to 1% of GE’s annual worldwide turnover.
The current investigation is limited to the assessment of breaches of the EU merger procedural rules and will not have an impact on the Commission decision approving the merger, which will remain effective.
Commissioner Margrethe Vestager, in charge of competition policy, said: “We need companies to work with us to ensure fast and predictable merger control, to the benefit of both companies and consumers. But we can only do our job well if we can rely on cooperation from the companies concerned – they must obtain our approval before they implement their transactions and the information they supply us must be correct and complete.”