The European Commission (EC) today said it had conditionally approved the planned USD4.3bn (EUR3.3bn) takeover of the aviation business of Italy’s Avio SpA by US conglomerate General Electric Co (NYSE:GE).
In a statement, the EC noted it had concerns that the proposed transaction would provide GE with significant influence in European consortium Eurojet Turbo GmbH, which comprises Avio, the UK’s Rolls-Royce Holding Plc (LON:RR), Germany’s Aero Engines AG (ETR:MTX) and Spain’s Industria de Turbo Propulsores SA (ITP). The particular group manufactures the engine for the Eurofighter combat aircraft, which in turn competes with planes that feature engines made by the US company.
In order to secure regulatory clearance, GE has submitted a series of commitments that adequately address the commission’s concerns and would make sure that Eurojet’s strategic information is properly protected.
The EC, which was informed about the planned acquisition on 13 May 2013, added it had worked in close cooperation with the US Federal Trade Commission (FTC).
The agreement on the purchase was announced in December, when GE said it would buy the aviation business from peer Finmeccanica SpA (BIT:FNC) and investment firm Cinven Group Ltd. At that time, the US conglomerate stressed it will not by acquiring Avio’s space unit. The takeover will allow GE to extend its participation in the jet propulsion sector of the aviation industry and also to beef up its global supply chain capabilities and expand marginqu