Word: mergers
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Dates: during 2000-2009
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...first time in 11 years and 400 deals, the European Union's trustbusters have slammed the gates shut on a merger of two American companies approved by American regulators, vetoing a proposed $43 billion purchase of Honeywell by General Electric by a unanimous 20-0 vote...
Weird, huh? Not in the age of globalization--for that, in effect, is what the General Electric Co., United Technologies Corp. and Honeywell International Inc. have just done. Last year GE outbid UTC for Honeywell; American antitrust authorities approved the merger. But--though the game isn't over--the deal appears to have been nixed by the competition division of the European Commission in Brussels, which is headed by an Italian, Mario Monti. (To continue the Connecticut theme, Monti studied at Yale.) For more than 10 years, the commission has claimed jurisdiction over any merger between firms whose combined global...
...John D. Rockefeller and Ernest Hollings--have expressed concern to the Europeans. Hollings, new chairman of the Senate Commerce Committee, said the developments supported those who think the E.C. seeks to "protect and promote European industry at the expense of its U.S. competitors," and warned that "denial of a merger...would undermine an already strained E.U./U.S. trade relationship...
...Silvio Berlusconi, conservative America's favorite European. In any event, GE competitors opposed to the deal are--like UTC--just as likely to be American as European. Airbus, Europe's flagship aviation company, says it supported the GE-Honeywell deal. I understand that only one airline formally opposed the merger, and I suspect it is based...
Rather than turn the case into an excuse for a trade war, officials should be considering its real issues. Monti's team--"understaffed and underpowered," in the words of an observer--relies too much on the comments of competitors for the analysis of a merger. The E.C.'s investigative and decision-making functions should be separated, as they are in the American system. Most important, global businesses need global-competition rules--and a global body to enforce them. That, however, would diminish the power of U.S. officials, including chairmen of Senate committees. So don't bet a chowder dinner...