The UK government has raised national security concerns related to the French state-owned EDF's deal to buy US General Electric's nuclear turbine business. The agreement was signed in November 2022 and the UK antitrust regulator approved it in May 2023 after an initial investigation.
However, the UK Cabinet Office in London has issued a statement expressing concern over the agreement and setting out a list of conditions. Deputy Prime Minister Oliver Dowden issued a final order on the deal to buy the unit through a subsidiary, GEAST UK, insisting that all parties must meet certain criteria including to “implement governance arrangements to protect sensitive information”.
“The Secretary of State considers that a risk to national security will arise because of the critical national security and defence capabilities relating to naval propulsion systems which are delivered through (the GE unit),” the government said, adding that the order is "necessary and proportionate to mitigate the risk to national security”.
The parties subject to the order are: EDF Energy Holdings Ltd; GEAST UK Ltd; GE Oil & Gas Marine & Industrial UK Ltd; and GE Steam Power Ltd. The final order requires the parties to:
- meet physical and information security requirements;
- implement governance arrangements to protect sensitive information;
- place a HM Government-appointed board observer on the board of GEAST UK Ltd and allow the board observer to observe meetings of the boards of GE Oil & Gas Marine & Industrial UK Ltd and GE Steam Power Ltd;
- establish a steering committee of the GEAST UK Ltd board to provide oversight of compliance with security requirements and protection of sensitive information; and
- maintain capacity and capability in respect of critical Ministry of Defence programmes in the UK.
The final order also includes a provision that, in circumstances where the Final Order is breached in a manner serious enough to jeopardise the fulfilment of critical Ministry of Defence programmes, the Secretary of State has the power to step in and take operational control of and/or takeover the relevant business or part of the business necessary for the fulfilment of those Ministry of Defence programmes.
GE Steam Power's nuclear business includes steam turbines, which are installed in about half of the world's NPPs, including in all of EDF's plants in France. The merger was also cleared by competition authorities in France, South Africa, Morocco and Ukraine.