Power merger may cut users’ choice

On one level, Alstom and ABB’s merger of their power plant manufacturing units is just another sign of consolidation in the face of shrinking profits and tough competition. With combined sales of $11bn, the new group will be the biggest supplier of power plant in the world, employing, for the time being at least, 54,000 […]

On one level, Alstom and ABB’s merger of their power plant manufacturing units is just another sign of consolidation in the face of shrinking profits and tough competition. With combined sales of $11bn, the new group will be the biggest supplier of power plant in the world, employing, for the time being at least, 54,000 people.

But the irony is that as power markets around the world become ever more competitive, the choice of equipment supplier has been significantly reduced. It may turn out that for all the benefits in terms of cost savings to ABB and Alstom, there may be little benefit to customers be they the generating companies or the industrial consumers of electricity. This is a point the competition authorities may want to consider carefully when they come to review the proposed merger.