Word: eu
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...EU Competition Commissioner Monti saw it as a straight question of competition. "The merger between GE and Honeywell, as it was notified, would have severely reduced competition in the aerospace industry and resulted ultimately in higher prices for customers, particularly airlines," he said...
...Europe is a bit more prevention-minded. The efficiencies of the GE-Honeywell deal would have brought prices down in the near-term; even Monti acknowledged that. But down the road, the EU worried that those lower prices would eventually starve the competition - especially the European competition - out of business. End result: one dominant company, monopolist's prices...
...that means for the U.S., from Washington to Wall Street, is that in globalized antitrust regulation the higher bar is the only bar. A merger of Connecticut-based GE and New Jersey-based Honeywell qualified for Euro-scrutiny because the combined revenues of the two companies exceed the EU's circuit-breakers of $4.3 billion in global sales and $215 million in EU sales...
...Honeywell qualified by a country mile, and so will a lot of other U.S. mergers. E.U. and U.S. antitrust officials work closely together, and for most of the '90s, if American companies could get a deal past their own government, they could get it past the EU. (The last big merger spiked by the EU, WorldCom-Sprint, was denied by the U.S. a day later.) Now, Bush's hands may be off the gates, but Monti's are still on. Which suddenly makes Europe a very imposing gatekeeper...
...That attitude could be bad for business in Europe if the continent is seen as protectionist by outside companies; it could be good for business everywhere if the European theory of consolidation, competition and the greater good turns out to be the smart call. But now that the EU has made clear its intention to set its own pace for global mergers, the immediate fallout will be that the next time Wall Street sees a potentially tricky merger coming along, it's rather likely to sneer and something nasty about the French...