U.S. approves GE buy of Converteam, with conditions

WASHINGTON (Reuters) - U.S. regulators gave General Electric Co conditional approval to buy Converteam, a French maker of high-efficiency motors for oil and gasoline refineries.

The Justice Department said on Monday that it would require GE to sell Converteam Group SAS's Electric Machinery Holding Co to proceed with the $3.2 billion deal for a majority stake in the French company.

"The divestiture will preserve the benefits of competition for refinery customers in the United States," said Sharis Pozen, the acting head of the Justice Department's antitrust division. "As originally proposed, the acquisition would have lessened the competition that currently exists among manufacturers of low-speed synchronous electric motors."

GE and Converteam, both of which make the high-efficiency motors, are sometimes the only bidders when companies seek to buy the motors, the department said in a court filing.

Electric Machinery accounted for about 3 percent of Converteam's 2010 revenue, GE said in a statement.

GE, whose energy business has made $11 billion worth of acquisitions in the past year, said in a statement that the deal would close "in coming weeks."

European antitrust regulators approved the deal in July.

Converteam also makes equipment to connect renewable power sources such as wind turbines to the electric grid.

GE said it would buy about 90 percent of Converteam, which was carved out of Alstom SA in a management buyout five years ago, from a group of current shareholders that includes Barclays Private Equity and LBO France.

GE's energy unit, which is buying Converteam, accounted for a quarter of GE's 2010 revenue.

GE's other big recent energy deals include the $3 billion takeover of Dresser Inc, which makes gas engines used in oil production and mining, and the $1.3 billion takeover of British oil equipment company Wellstream Holdings.

GE shares ended 3.2 percent higher at $16.04 on Monday.

(Reporting by Diane Bartz, editing by Robert MacMillan and Matthew Lewis)