General Electric has offered to sell a 19.9% stake in leasing arm GE Capital Aviation Services (GECAS) in a bid to win European Commission (EC) approval for its $41 billion merger with Honeywell.
The informal offer depends on the EC requiring fewer divestitures of Honeywell avionics businesses than offered by GE when it submitted its final proposal on 14 June, reports suggest.
GE is prepared to sell a minority stake in GECAS to a non-competitor, such as a financial institution, sources say. Previous EC proposals that the company sell some or all of its aircraft leasing arm to a competitor or to the public were rejected by GE.
European competition officials are concerned that GECAS could use its financial muscle to force clients to buy GE/Honeywell products.
In return for selling some of GECAS, GE wants the EC to approve the deal with fewer or no divestitures. In its "best and final" proposal, the company offered to sell off Honeywell avionics, engine and other businesses totalling $2.2 billion in annual revenues.
This fell far short of the $6-7 billion in divestitures reportedly sought by EC competition officials.
GE's offer comes amid unconfirmed reports that some national competition authorities have told the EC they are not opposed to the merger as proposed by GE.
The EC is required to seek input from member nations before making its final ruling, which was set for 3 July, but could slip if negotiations between the two sides continue. Initial media reports suggested the EC had rejected the revised bid.
Source: Flight International
