POWER January 2017 - 46

INDUSTRY REVIEW & PREVIEW
Acquisitions Reset the Global Gas
Turbine Market
Courtesy: GE
A series of acquisitions among major suppliers in the gas turbine market over the
past couple of years has changed much of the global landscape for gas-fired power.
Several long-standing firms have been swallowed up, while others have gained
new prominence thanks to conditions laid on the big deals by regulators. What this
means for generators and developers remains to be seen, but some trends are beginning
to emerge.
Thomas W. Overton, JD
I
n the space of about a year, the global gas
turbine landscape underwent some significant
changes as an array of smaller firms
were snapped up by heavyweights GE and
Siemens, and regulators charged with scrutinizing
and approving the acquisitions forced
additional shuffling of business units. What
that means for those working in the gas turbine
space remains to be seen, but it's clear
things are no longer what they were.
GE and Alstom
The biggest shift came with GE's $10.6 billion
acquisition of most of Alstom's power
and grid business units. Begun in early 2014,
the deal was originally going to be even
bigger, encompassing all of Alstom's gas
turbine, wind, hydro, nuclear, and grid businesses.
That bid alarmed many in the French
government, who were concerned about foreign
ownership of some of the nation's most
46
important manufacturing
elements. As of
2013, Alstom's energy division had $15 billion
in worldwide sales and employed 46,000
people globally, while its transmission and
distribution division generated $5.2 billion
in sales and employed 18,000. The deal also
comprised the sale of GE's rail signaling
business to Alstom for $800 million.
The bid sparked concern in rival Siemens,
which hurriedly drafted a competing
offer that was ultimately never submitted,
despite invitations from French bureaucrats.
Shortly after the GE bid was announced, the
French energy and economic ministry issued
a decree revising a 2005 law, originally
covering the defense industry, that gave it
the power to block foreign acquisitions in
the energy sector-a move designed to slow
things down until the acquisition could be
thoroughly reviewed.
Alstom's board formally accepted the GE
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offer in June (Figure 1), but things were far
from done. The European Commission (EC)
also needed to sign off on the deal, a process
that took more than a year. The EC was concerned
that the acquisition would eliminate
one of GE's main competitors, and the antitrust
investigation ultimately forced some
significant changes.
Among the largest was that, rather than
selling the entirety of its gas turbine unit to
GE, Alstom would instead sell portions of it
to Italian firm Ansaldo Energia. This comprised
Alstom's 50-hertz GT26 and GT36
turbine technology, existing upgrades and
pipeline technology for future upgrades, a
large number of Alstom engineers, and two
test facilities for the turbine models in Birr,
Switzerland.
GE said when the deal-its largest ever
despite the reduced scope-closed in November
2015 that it represented a major step
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