The European Union court has upheld a ban on General Electric buying Honeywell International, citing the merger would have created a dominant position in markets for jet engines for large regional aircraft, for corporate jet aircraft and for small marine gas turbines.
Although the United States antitrust authorities had approved the deal, the EU’s competition agency rejected GE’s proposed $42 billion purchase of Honeywell in 2001. The agency has the power to kill anti-competitive mergers that do a lot of business in the 25-member European Union, as GE and Honeywell do.
A Brussels competition lawyer said both sides could legitimately claim some part of victory, even though GE lost. Honeywell and GE abandoned their merger sometime ago, with legal points being the whole reason to continue their battle. The main sticking point was the Commission’s use of “conglomerate effects” economic theory, which is a corporation owning many different lines of businesses that able are to gain extra power by combining those with its new business.