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GE must sell Converteam`s low-speed motors business
Published:  30 August, 2011

The US Department of Justice (DoJ) has told General Electric that it must divest Converteam’s low-speed synchronous motors business if it wants to proceed with its planned $3.2bn takeover of the French engineering group. The DoJ is worried that if GE acquired Converteam’s Electric Machinery business, it would reduce competition, especially in the market for compressor motors for oil and gas applications.

In March, GE announced its intention to buy a 90% stake in Converteam, which supplies automation and electrification equipment and systems, including medium-voltage drives and advanced rotating machines. At present, GE and Converteam compete with each other in the low-speed synchronous motors market.

“As originally proposed, the acquisition would have lessened the competition that currently exists among manufacturers of low-speed synchronous electric motors,” says Sharis Pozen, acting assistant attorney-general in charge of the DoJ`s antitrust division. The operations that the Department wants GE to divest include Converteam`s Electric Machinery plant in Minneapolis, US, where it makes low-speed synchronous motors.

The plant, which dates back to 1891, custom designs and manufactures motors and generators. It has supplied more than 250,000 large machines, with a combined capacity of more than 1GW, around the world.

Converteam claims that the site developed: the first high-starting-torque synchronous motor; the first solid-state brushless excitation system; the first automatic starting system for synchronous motors; and the first large two-pole induction motor design to operate below its first critical speed. In the 1970s, it pioneered the Duraguard insulation system, using epoxy resin tape and vacuum pressure impregnation.

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