Thursday

28th Mar 2024

Decision to block merger provokes outrage in US

The decision by the European Commission to block the merger between General Electric Co. and Honeywell has prompted harsh criticism by American President George Bush and other top US officials, including Treasury Secretary Paul O'Neill, according to CNN.

Several US senators accused the EU of "protectionism" and have warned that rejection of the GE deal could hurt transatlantic trade relations or bring retaliation from Washington.

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Mario Monti, Commissioner for competition, rejected US criticism of the decision, according to the International Herald Tribune. This was by no means an EU versus US case, he said. Yes, the two companies were American, but their nationality was irrelevant. Not only is this the first time that the European Commission has decided to block the merger between two American companies, but it also ruled despite antitrust regulators in America reaching the opposite conclusion.

Of nearly 400 cases involving US companies reviewed in Brussels since 1990, only one deal was barred - the merger between WorldCom and Sprint. Since then, WorldCom has appealed the verdict, although no decision has yet been reached.

Despite US criticism of the decision, antitrust lawyers in both EU and US camps are saying that the European approaches to competition are, if anything, increasingly similar to those in the States. In Europe, the decisive question is whether a merger will create or strengthen a position of market dominance, writes the International Herald Tribune. In the United States, the question is whether a merger will substantially reduce competition. In practice there is not that much difference.

Commission blocks merger deal

The European Commission has decided to prohibit the General Electric's $41 billion purchase of Honeywell. It is the first time the EU blocks a merger between two American companies. In May the US competition authorities accepted the deal, which would have been the largest industrial take-over in corporate history.

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EU Modernisation Fund: an open door for fossil gas in Romania

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