Word: ge
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Dates: during 2000-2009
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When Welch arrived at Monti's office on June 13, the Commissioner was flanked by seven aides. Monti stiffly read out his conditions. "It wasn't a negotiating session," said a GE lawyer who was present. GE, said Monti, had to sell 19.9% of the leasing arm in such a way that it "would assure nondiscrimination in the purchasing policies of GECAS...
Monti told TIME that the key point was that GE could not restrict those who would buy the shares. But to some GE advisers, this could mean only one thing--Monti wanted GE to sell part of GECAS to a competitor. That was never going to fly. "It would have been like asking [Ford CEO] Jacques Nasser to drive a Toyota for 20% of the day," says Yale economist Barry Nalebuff, who advised GE. Monti asked Welch to consider the terms and return that afternoon. Welch did, and rejected them. The next day, Welch called Card and flew back...
Which, in effect, it was. GE made a last-ditch effort, suggesting that it sell a part of GECAS in a private placing to a handpicked buyer. Monti didn't take that seriously. Honeywell's CEO Michael Bonsignore desperately offered to drop the purchase price of his company, but Welch wasn't interested. And so, on July 3, the full European Commission endorsed the decision that Monti had made. "We remain," said Monti, "distinctly unimpressed by any political pressure...
Welch says GE's lawyers are considering an appeal to the European Union's Court of First Instance in Luxembourg. That won't save the Honeywell deal--such a case might not be settled for two years. But it would give GE a chance to disprove the allegation that it had a "dominant position" that it was likely to abuse. If that stain remains on the record, GE is going to find it hard to make any significant acquisitions in Europe. Honeywell has a new CEO; when the deal went down, so did Bonsignore. His successor: Larry Bossidy, a longtime...
...GE's competitors down a bottle or two of Belgium's cherry-flavored beer in celebration? Probably not. Some of the opponents wanted the deal weakened, not killed. "I feel like a golfer who's just overshot the green," said an executive on the "winning" side. Had the deal gone through, GE's opponents would have been able to pick up some of the Honeywell businesses Welch was ready to divest. Now they can't. At least some on the GE side of the case felt that the competitors' appetite for GE's spare parts would trump their fear...