As expected, GE and Honeywell have now formally launched appeals in the Court of First Instance against the European Commission’s decision to block their proposed $43 billion merger on competition grounds. This will probably mean a lengthy and possibly acrimonious legal battle with the Commission that is likely to last last four years and could further worsen the relationship between the companies and the EU’s regulator.
Nonetheless the two companies, and legal commentators, believe that the battle is worth fighting even though GE and Honeywell are unlikely to win.
No such challenge to the Commission’s watchdog has ever succeeded and in this case the Commission has made it known that it intends fighting the appeal vigorously. But the appeal is on better grounds than most, and in any case the aim is not to revive the merger, which has already been abandonded, but to reverse some of the Commission’s conclusions, in particular those that might impact on other deals by making it possible for their competitors to use them in future court cases.
GE’s appeal is understood to attack several aspects of the Commission’s ruling, primarily its finding that it had a dominant position in the jet aeroengine market and its conclusion that GE and Honeywell could have ‘bundled’ aerospace products and services to squeeze out rivals. GE is also believed to have complained about alleged procedural irregularities by the Commission, possibly its refusal to reveal the contents of anonymous evidence.