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Wednesday, 6 June, 2001, 17:12 GMT 18:12 UK
GE seeks deal with EU regulators
Aircraft jet engine
EU: Concern that GE may use the deal to pressure aircraft engine buyers
General Electric (GE) is reported to be ready to sell part of Honeywell to overcome European Union opposition to its $49bn bid for the avionics and controls company.

The European Commission is concerned that GE and Honeywell together will have a near-monopoly on engines for large regional jets.

Competitors such as Rolls Royce and United Technologies told the regulators that GE would have an unfair advantage unless it sold part of its business or accepted restrictions on its marketing.

Bloomberg news agency reported that, in a 140-page statement of objections to the deal, the commission said GE was using its financial might to sway airlines and aircraft manufacturers to choose GE engines over competing brands.

Analysts believe GE is unlikely to give up Honeywell's avionics or GE Aircraft Engines, although some smaller components of the business might be sold.

July deadline

The European Commission is the regulatory body of the 15-nation EU. It can block or force changes to company mergers and takeovers even if the firms are not based in Europe.

GE's chief executive Jack Welch, who postponed his retirement to complete the Honeywell purchase, will be in Brussels on Friday to meet EU regulators as negotiations enter their final stage.

GE must present its proposals by 14 June and the regulators then have one month to rule on the acquisition.

The two companies have already received tentative approval from US and Canadian regulators.

The deal, if completed, is likely to be the largest corporate takeover in the world.

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See also:

23 Oct 00 | Business
General Electric buys Honeywell
20 Apr 01 | Business
Honeywell slashes 6,500 jobs
12 Apr 01 | Business
General Electric profits up 16%
27 Nov 00 | Business
New chief for world's biggest firm
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