NEW YORK (AP) -- Antitrust regulators will allow General Electric Co. to acquire French oil and gas equipment maker Converteam, but GE will have to sell Converteam's electric machinery holding company business.
The U.S. Department of Justice said Monday that GE and Converteam are two of the leading makers of low-speed synchronous electric motors used in the North American oil and gas industry. The agency said the companies have been bidding against each other on projects related to those motors since 2007, and combining those businesses would significantly reduce competition in the development, making and sale of those motors.
The divestiture ruling includes the Minneapolis facility that makes all the motors, and all the assets associated with that business.
The Justice Department said it filed a civil antitrust lawsuit to block the deal, and it also filed a proposed settlement to the lawsuit. If the settlement is approved, it would resolve the concerns in the lawsuit.
Converteam designs high-efficiency systems that reduce energy consumption and greenhouse gas emissions. GE, of Fairfield, Conn., said in March it was buying 90 percent of Converteam for $3.2 billion. The deal helps put GE in position to profit from what is expected to be a 20-year boom in oil and natural gas demand, particularly in high growth markets.
GE plans to buy the remaining 10 percent of Converteam from the company's management over the next two to five years. The exact price will depend on the timing of the sale and Converteam's performance, but GE said it does not expect the total to exceed $480 million.
Shares of General Electric rose 50 cents, or 3.2 percent, to $16.04 as the market traded higher on Monday. In aftermarket trading, the stock slipped 1 cent to $16.03.