Siemens to win unconditional EU approval for Dresser-Rand deal

Saturday, May 09, 2015

German industrial group Siemens is set to secure unconditional EU approval for its $7.6 billion bid for U.S. oilfield equipment maker Dresser-Rand (DRC.N), two people familiar with the matter said on Friday.

The acquisition, Siemens' largest ever, will boost the trains-to-turbines group's presence in the United States and the shale exploration boom there, and also take it a step closer to rival General Electric (GE.N).

The European Commission warned in February, when it opened a full-scale investigation, that the deal might reduce competition and drive up prices. It said the merged company would compete only with General Electric in turbo compressors and the engines which drive these compressors.

Such concerns usually put pressure on companies to offer concessions such as selling overlapping assets or to make it easier for rivals to use their technologies or patents in order to ease regulatory concerns.

Other sources close to the matter said Siemens had sought to allay such regulatory concerns by pointing to the competition from other companies which also make compressors for other uses.

The Commission has not sent a so-called statement of objections to Siemens, the sources said. "This means unconditional clearance," one said.

Such a document lays out specific concerns, giving the regulator leverage in demanding concessions. It is also a step prior to a veto on a merger if companies cannot convince the Commission that a deal will not harm competition.

Both the Commission and Siemens declined to comment. The EU competition authority has set a July 24 deadline for its decision.

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