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EC clears GE's LM Wind Power acquisition

By: Tom Russell 21/03/2017 4C Offshore

General Turbines

The European Commission (EC) has approved, under the EU Merger Regulation, the acquisition of Danish blade designer and manufacturer LM Wind Power Holding A/S by General Electric (GE).

The acquisition is valued at 8.3 times 2016 forecast EBITDA of LM Wind Power Holding A/S. For the first half of 2016, LM Group Holding A/S reported sales of €491m (£422m) and EBITDA of €87m which represented year-on-year growth of 40% and 81% respectively.

The Commission concluded that the merged entity would continue to face effective competition in Europe. LM Wind Power designs and manufactures blades that are sold to GE and its competitors as a component for wind turbines.

The Commission's investigation focused on the effect of the transaction both on the upstream market for the manufacture and supply of wind turbine blades, as well on the downstream markets for the manufacture and supply of onshore and offshore wind turbines.

The investigation found that GE has a relatively small market share in both onshore and offshore wind turbines and although LM Wind Power has a significant market share, its market position has been decreasing in the past few years and in-house blade production also has to be taken into account.

The Commission concluded that competitive concerns would be unlikely to arise after the transaction because GE would not be in a position to significantly affect the upstream market. In particular since competing blade manufacturers would continue to have access to wind turbine manufacturers other than GE.

In relation to the downstream markets, GE would continue to face significant competition from other major turbine manufacturers, such as Siemens, (MHI) Vestas, Nordex and Senvion, who either manufacture their blades in-house and/or are not dependent on LM Wind Power for supplies.

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EC clears GE's LM Wind Power acquisition

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