US orders GE to offload unit to win approval for oil deal
New York (AFP)
US antitrust regulators on Monday ordered General Electric to divest one of its units in order to win approval for the merger of its oil services business with Baker Hughes.
Without the sale, the proposed merger would threaten competition in the petroleum refining business where the two companies compete vigorously, the Justice Department said.
Both companies supply chemicals to prevent corrosion and damage to petroleum refinery equipment, and the department said the sale of the GE's water and process technologies business would resolve the competitiveness concerns and allow it to approve the deal with Baker Hughes.
"Competition to provide refinery chemicals and services benefits a vital sector of our economy," said acting assistant attorney general Andrew Finch of the antitrust division.
"Today's action will ensure that oil and gas refiners continue to receive competitive prices."
The Justice Department filed a civil lawsuit in federal court to block the GE-Baker Hughes transaction and simultaneously filed a proposed settlement that, if approved by the court, would let the deal go through.
GE in October 2016 announced the proposed merger of its oil services business with that of Baker Hughes, the third biggest company in the sector after Schlumberger and Halliburton.
GE on Monday named GE Healthcare president John Flannery chief executive, replacing Jeff Immelt as of August 1.
© 2017 AFP