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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...
Those Washington Senators and Cabinet members who seem to think Monti was acting mainly to protect European companies are laughably off base. In Europe, everyone knows that GE's most determined opponent was United Technologies, Honeywell's jilted American suitor. Chris Bright, one of GE's lawyers in Brussels, says the Commission sent United Technologies away "to find the mud, and in the end, unfairly, the mud stuck." One more lesson: the slow confirmation process in Washington has a cost. Had James been confirmed as antitrust chief at the Justice Department by March, say, regulators on both sides...
...biggest lesson of all from the GE case is this one: soon, something like it will happen again. The Commission in Brussels is currently engaged in three investigations of Microsoft, one of them driven by an American competitor, Sun Microsystems. Monti's staff is looking at the behavior of chipmaker Intel, at the behest of one competitor from the U.S. and one from Taiwan. U.S. regulators will review Switzerland-based Nestle's purchase of Ralston Purina, which would consolidate more than 50% of the $3 billion U.S. cat-food market. For now, the only antitrust authorities that really matter...