KIERAN DALY and STEVE NICHOLS
The $42 billion GE-Honeywell merger is teetering on collapse today with GE's final offer falling short of the European Commission's (EC) requirements. Both Honeywell and GE are considering that the merger - the biggest industrial takeover ever - is now unlikely to happen. As the Paris airshow gets under way, the companies are discussing whether to withdraw the proposal themselves or let the EC's process run its course to the final 12 July deadline. But Jeffrey Immelt, GE president and chairman elect, yesterday made clear that he had made his final offer. He told a Paris press conference: "At this point our final offer is far short of what the Commission has suggested. It is now in the formal Commission process over the next month or so. "We are very far apart and fundamentally we are planning our future without Honeywell. We are in a process here which makes it look as if it is not going to be approved. "We have no fight to pick with the European Commission, we just have a different view." He said GE had already offered $2.2 billion worth of product disposals by revenue as well as the ‘ring-fencing' of aircraft leasing arm GECAS, and added: "We have not necessarily given up the deal but we have submitted our formal offer and there will be no more negotiation from GE.
Immelt repeatedly stressed GE's commitment to Europe, where it generates $26 billion of revenues, and insisted the negotiations with the Commission had been "open and honest". The decision on whether to pre-empt competition commissioner Mario Monti by voluntarily pulling the deal now depends on the outcome of talks between GE and Honeywell. Bob Johnson, president Honeywell Aerospace, says: "I'm not going to destroy my merger papers, but they are staying in a drawer - now is the time to get back to work." If GE and Honeywell abandon the deal, Honeywell may be left wide open to other bids ¡ straight back to where it was last year.
Source: Flight Daily News
