The European Commission blocked General Electric Co.‘s proposed $43 billion acquisition of Honeywell Int’l today, the first time Europeans have killed a merger approved by the United States.

EU Competition Commissioner Mario Monti acknowledges this is the first time the European Union and U.S. antitrust agencies have looked at the same facts in the same market and gone different ways. “The merger between GE and Honeywell, as it was notified, would have severely reduced competition in the aerospace industry and resulted ultimately in higher prices for customers, particularly airlines,” Monti says.

The 20-member EU executive’s decision is a very different conclusion to the U.S. finding in May that only minor changes were needed to win approval. The last chance to save the deal evaporated on Friday when GE CEO Jack Welch rejected a suggestion by his counterpart at Honeywell, Michael Bonsignore, that he cut $1.7 billion from Honeywell’s price tag to compensate GE for extra sell-offs to win Brussels’ approval for the merger.

The defeat was a major disappointment for Welch, who had delayed his departure from the company to see the deal through. But one Wall Street analyst said the decision might in fact make life easier for his successor, Jeffrey Immelt. “GE’s going to do fine with or without Honeywell,” says William Fiala of Edward Jones. “Honeywell was an opportunistic acquisition. It was driven in part by the defensive nature of United Technologies trying to buy Honeywell.”

The Commission’s review of the case also brought down criticism from President Bush and top U.S. officials, including Treasury Secretary Paul O’Neill, who said EU rejection would be “off the wall.”

GE shares were trading 73 cents lower at $49.47 today, while Honeywell shares were up 94 cents at $35.05.

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