GE and Honeywell contest EU veto

'Market dominance' fears led the EC to block the merger

US manufacturing giants General Electric and Honeywell are to appeal against the European Commission's decision to reject their merger plans.

The two companies said they will appeal separately, with Honeywell claiming the decision to block the $43bn merger had no legal merit.

"We believe there were errors of substance and procedure," a GE spokesman said.

"It is intended overturn the decision based on these errors."

But even if the appeals succeed - and the process itself will take at least a year - neither company would be drawn on whether the merger itself would be back on the cards.

The EC's ruling on the merger was announced by Competition Commissioner Mario Monti in July after a five-month investigation.

Going it alone

The decision marked the first time that Europe has moved alone on an international merger rather than in concert with the US, which had already given its blessing.

Monti: Decision now under the microscope

The commission said that GE had a dominant position in the market for commercial and regional aircraft jet engines, and that a combination of the two companies risked enabling them to bundle products and shut out competitors.

While GE has not detailed the basis of its appeal, reports said the firm's complaints will centre on this anti-trust finding, which the company fears that rivals could yet exploit as a legal weapon.

GE is also thought to be protesting at the commission's refusal to divulge the contents of anonymous evidence received during its investigation.