Siemens has received approval from the European Commission for the proposed acquisition of Rolls-Royce's aero-derivative gas turbine business, compressor activities and aftermarket services, and Rolls Royce's 50% stake in Rolls Wood Group, both of the UK.
The Commission has approved the transaction under the EU Merger Regulation.
An investigation by the commission has confirmed that the transaction will not raise any competition concerns, in particular because the parties are not close competitors and a number of effective competitors will remain in the market after the transaction.
Focused on the supply of small and medium-sized gas turbines and compressor sets, where both Siemens and Rolls-Royce are active, the Commission's investigation found that in the field of gas turbines customers do not view Siemens and Rolls-Royce as close competitors because of the technological differences between their products.
The investigation has also been carried out on concerns that after the merger Siemens could stop supplying certain Rolls-Royce's ADGT to compressor manufacturers and prevent them from competing with the merged entity for certain offshore oil and gas projects.
However, the investigation has shown that customers of oil and gas compressor sets typically view the compressor as the most customised component, while the gas turbine is seen as a more standardised product. Customers are therefore unlikely to accept a compressor model in a set that does not fully meet their specific technical requirements. Also, an alternative source for the supply of ADGTs will remain in the market.