COMPETITION/ENGINEERING: COMMISSION STALLS IN ABB TALKS OVER ELSAG BAILEY BUY.

Summary: The European Commission's Merger Task Force has extended its deadline to rule on the planned acquisition by the Dutch subsidiary of Swiss-Swedish electrical engineering giant Asea Brown Boveri of Elsag Bailey Process Automation NV from Italy's Finmeccanica by two weeks, until December 16, a Commission official has confirmed, without, however, revealing the reason behind the move. The Commission received an initial notification under the Merger Regulation on November 3, which if cleared, would make ABB the world's largest supplier of industrial automation systems. Under EU competition rules, the decision to delay its own ruling over the deal can be made if the national anti-trust authority has called back the case, the details of the notification are incomplete or finally, that the companies have changed the terms of the deal.

Pressure. The last of the three scenarios is the most likely one as ABB is holding talks with the Commission on its proposed ECU 1.8 billion purchase of Finmeccanica's Dutch unit following pressure from its competitors in favour of a second-phase in-depth probe, delaying the merger for at least another four months. ABB's rivals have been reported to be particularly concerned about the Swiss-Swedish firm's increased share of control systems for power generation. "ABB will have a dominant position in the power market", one industry source said, adding that the deal would increase pressure particularly on Siemens, another strong supplier of automation systems. The extension of the Commission's deadline to December 16 indicates the EU executive is concerned that the deal may reduce competition in some markets, but also that ABB is willing to address those worries swiftly, industry sources said. World's largest supplier. The electrical engineering giant said in October its Dutch subsidiary ABB Transportation Participation B.V...