The European Commission approved Baker Hughes' (BKR) proposed acquisition of Chart Industries under the EU Merger Regulation, subject to compliance with commitments offered by the two US-based companies, the Commission said in a statement on Friday.
The Commission said its investigation found the deal, as originally notified, raised concerns that it could reduce competition in global markets for liquefied natural gas liquefaction equipment and technologies.
According to the Commission, Baker Hughes holds a dominant position in the market for LNG compressor trains and could have used that position to give Chart's LNG business an unfair competitive advantage.
The regulator said this could have included tying sales of compressors to Chart products, reducing interoperability with third-party equipment, or using commercially sensitive information obtained through projects involving rival LNG technology providers.
The Commission said combining the companies' LNG products and technologies could have harmed competition, with negative effects on prices and innovation.
To address those concerns, Baker Hughes and Chart committed to divest Chart's proprietary IPSMR process technology and its small-scale process technology business to a Commission-approved buyer.
The companies also agreed to ensure interoperability between their LNG equipment and third-party equipment.
The commitments will remain in place for 10 years and will be monitored by an independent trustee under the Commission's supervision.
The Commission said the remedies eliminate Baker Hughes' ability and incentive to favor Chart's LNG business, allowing the transaction to proceed without raising competition concerns. It said the approval remains conditional on full compliance with the commitments.
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