GE reignites talks with EC

June 27, 2001 Posted: 2107 GMT

NEW YORK (CNNfn) -- General Electric Co. confirmed that it held informal talks with the staff of the European Commission on Wednesday in an attempt to gain approval for its $42 billion takeover of Honeywell International Inc., a spokesman told CNNfn.com.

Informal advisors for GE discussed draft ideas or options that were "within the financial parameters of GE's June 14 proposal," spokesman Gary Sheffer said.

"We have said all along that we will continue to advocate for our proposal and we are continuing to do that," Sheffer said.

Sheffer declined to comment on press reports that GE offered a structural commitment over Gecas, its aircraft leasing arm. GE is said to have offered to sell a stake in Gecas, the Financial Times said.

GE Chairman Jack Welch, who delayed his retirement to see the $42 billion GE-Honeywell merger through, was not present in the negotiations. GE's informal advisors consisted of its lawyers, a source close to the negotiations said.

However, prospects for GE's $42 billion takeover of Honeywell International Inc. still appear dismal. On Monday, all but one of the 15 EU member countries backed the EC draft to block the merger.

GE agreed to buy Morristown, N.J.-based Honeywell, a maker of aircraft engines and products for industrial heating, last October. GE Chairman Jack Welch agreed to delay his retirement, originally planned for April, until the end of the year to see the Honeywell deal through. The merger has received regulatory approval in the United States and Canada.

Fairfield, Conn.-based GE on June 14 submitted its final proposal of concessions it would make to receive EC approval. The Commission wanted the U.S.-based industrial conglomerate either to spin off GECAS or sell shares in the unit. Instead, GE proposed to set up a separate audit and management structure for GECAS and sell $2.2 billion worth of Honeywell's aerospace products business.

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