Lawyers for General Electric Co. (GE) and Honeywell Int’l Inc. went into a hearing Tuesday to defend the companies’ $41 billion merger plans against objections from European Union (EU) antitrust regulators. Competitors and customers will be given a chance to comment today.
An EU decision is not due until July 12. The merger has already been conditionally cleared in the United States and Canada.
After six hours of talks, one company lawyer said the meeting was going smoothly, but declined to elaborate. None of the lawyers and observers would comment heading into the two-day session, which is being held behind closed doors. At Honeywell’s headquarters in Morris Township, N.J., spokesman Tom Crane says, “We’re not commenting on the specific discussion, just that we are continuing to work with the European Union to resolve any issues with them.” His statement was echoed by GE spokeswoman Louise Binns.
Analyst Michael Linsky, managing director with McDonald Investments Inc. in New York, said he doubted the EU would set any deal-breaking conditions. “I think the odds are GE will find it acceptable and workable,” Linsky says.
The U.S. conglomerates sent a written response to the EU’s objections last week. European regulators have expressed particular concern that a combined GE-Honeywell could bundle aircraft engines and avionics into packages and sell them to Boeing or Airbus at discounts competitors like Britain’s Rolls Royce PLC and France’s Thales SA couldn’t match.
GE has already suggested it could introduce “transparent pricing,” where the price of each component in a package is clearly laid out.
