'Financial Times': GE-Honeywell Merger 'Still In The Brinkmanship Game'
DEBORAH MARCHINI, CNN ANCHOR: A huge merger in the United States may be put on ice because of actions by European regulators. Hugh Carnegy is world news editor of the "Financial Times." And he joins us now from London with a story of what European regulators have to say about General Electric's acquisition of Honeywell -- Hugh.</s>HUGH CARNEGY, WORLD NEWS EDITOR, "FINANCIAL TIMES": Good morning. Well, yes, the EU got involved in this because they're worried about the effects in the market of the combination of GE and Honeywell, particularly in regional aircraft engines, where the two are amongst the two biggest players -- I mean, a group of only about four worldwide. They're also worried about the combination of these two in the more general aircraft industry. Honeywell supplies some of GE's competitors, for example, and the combination of GE's engineering with Honeywell's avionics is a very powerful one. And the regulators are worried about them having too much market power. Now, you may say, Why is this the business of the European union? But you'll recall a couple of years ago that the European union also got involved on the Boeing-McDonnell Douglas merger and demanded a few changes there. So, they are sending some representatives over to the states this week to discuss this with U.S. regulators, and to go on visits to the companies and some of their competitors to layout their concerns.</s>MARCHINI: What's been the reaction of the companies and of the stocks?</s>CARNEGY: Well, the stocks have -- the stocks of both companies have been damaged last week by this news that the EU was raising concerns and is putting it into a four-month-long investigation, which means that Jack Welch's original intention of doing this deal, stitched up by the end of February, has been put back considerably. But interestingly, also, Jeffrey Immelt, the successor to Jack Welch who will take over when Jack Welch steps down at GE, he has said, If you impose too difficult measures on us to put this deal through, we may walk away from it. Now, I think we're probably still in the brinkmanship game here, but clearly there's quite a lot of negotiating to do.</s>MARCHINI: I dare say. Hugh Carnegy of the "Financial Times," thank you.