On October 19th 2000, Jack Welch, CEO of General Electric (GE), one of the three leading global manufacturers of airplane engines, announced the $42 billion merger “General Electric 2000 Merger Sub, Inc.” with Honeywell (HON), a rival industrial conglomerate.
GE is an American multinational conglomerate corporation headquartered in Fairfield, Connecticut. It is the only company listed in the Dow Jones Industrial Index today that was also included in the original index in 1896. In 2000, General Electric employed 223,000 people in over one hundred countries, counting 85,000 in Europe only , and reported net earnings of $13billion on revenue of $130billion.
General Electric had between 43 and 65% of the market depending on …show more content…
A few minutes later, he decided to outbid the offer and ended up winning the bid.
Following their agreement, GE would be exchanging their social capital shares for Honeywell’s representative shares. Honeywell’s common stocks would then cease to exist resulting in GE acquiring sole control of Honeywell.
“General Electric 2000 Merger Sub Inc.” would have been the largest industrial merger between two American companies. Although it was cleared and endorsed by the Department Of Justice and many other jurisdictions, the European Commission derailed it since part of the activities was exercised in Europe.
After the commission decided to block the deal, it was the first time European regulators were able to reject a merger between US companies previously approved by the American Department of Justice.
The goal of this paper is to dismantle the merger case, to understand the transatlantic divergence in GE/Honeywell as well as the economic theory behind the decisions that were taken by different parties, and to finally provide a critique of the final judgment and evaluate the aftermath of this