The document summarizes a failed merger attempt between GE and Honeywell in 2001. The $40 billion merger would have been the largest industrial merger in history. However, the European Commission blocked the merger due to concerns about horizontal overlap, vertical integration, and conglomerate effects creating too strong of a combined entity with huge market share and near-monopoly in some markets. GE proposed some divestments to address issues but ultimately did not accept the EU's suggestions, causing the merger to fail.

1. Mergers and Acquisition
GE and Honeywell: A failed merger
attempt
MMS FINANCE – GROUP 7 PRESENTED TO : MRS. CELINA JOY

2. GE and Honeywell : A failed merger Attempt
1 Introduction
2 GE background
3 Honeywell background
4 Proposed merger - part 1
5
Proposed Merger – part 2
6
Conclusion
7
Question – answers and discussion

3. Introduction
Introduction to the case
•Biggest merger in industrial history,
 valued at over $40 billion
•Deal would increase size of GE by one third.
•GE was attracted by Honeywell’s aerospace
business.
•The merger was passed by united state
department of justice.
Presented by : Vaibhav Coming up : EC dashes merger

4. Introduction
Introduction continued
• July 3rd, 2001, EC dashed all the hopes of
merger between GE and Honeywell.
•Mario Monti’s view
 Creation of strong and powerful entity
together,
 Huge combined market share,
 Near monopoly in market.
•EC’s demand & restriction.
•An epic disspproved merger.
Presented by : Vaibhav Coming up :GE background

5. GENRAL ELECTRIC
GE Background
1872
2000’s 1892
1990’s 1894
1981 1922
1972 1940
1964 1952
Coming up :Honeywell background
Presented by : Ketki

6. Honeywell
Company overview
Coming up : Proposed Merger
Presented by : Mehul

7. FINANCIALS
GE & HoneyWell
Gross Profit GE ($ in Millions)
Revenue GE ($ in Millions)
Gross Profit Honeywell ($ in Millions)
Revenue Honeywell ($ in Millions)
129.853 125.913 131.698
78.03 76.816
50.128
25.023 23.652 22.274
5.933 3.223 4.659
DEC -00 DEC-01 DEC-02
DEC -00 DEC-01 DEC-02
Coming up :proposed merger
Presented by : Imran

8. FINANCIALS
GE & HoneyWell
Net Income for equity shareholders GE ($ in Millions) PBIT GE ($ in Millions)
PBIT Honeywell ($ in Millions)
Net Income for equity shareholders Honeywell ($ in
Millions) 14.118 30.166 30.763
13.684 29.107
12.735
1.659
-0.099 -0.22
2.879
-0.017 -0.601
DEC -00 DEC-01 DEC-02
DEC -00 DEC-01 DEC-02
Coming up :financials continued
Presented by : Imran

9. Proposed merger - I
Expected Synergies
Honeywell’s businesses were a good fit with GE’s own
businesses in aircraft engines, industrial systems and
plastics.
90 % overlap with GE as compared to 70% overlap with
UTC
Perfect fit into the gaps in product line
Aerospace business of Honeywell was a major
attraction.
Coming up :Proposed Merger part 1 continued
Presented by : Gouri

10. Proposed merger - I Continued..
Financial synergies - Around 1.5 billion $ but by
mid-2001, it was upgraded to 3 billion $.
Benefits to GE:
• balance between manufacturing and financial
segments
• access to industrial assets and technological expertise
• Contribution of GECAS will reduce
Coming up :Proposed Merger part 2 continued
Presented by : Gouri

11. Proposed merger- II
EC plays a spoil sport in dream merger
The European Union (EU) law.
Merger passed by US Department of Justice.
The European commission (EC) Report.
Coming up :Proposed Merger part 1 continued
Presented by : Rajeev

12. Proposed merger-II
EC’s justification for barring the merger
Horizontal overlap
Vertical integration
Conglomerate effects
Coming up :Proposed Merger part 2
Presented by : Rajeev

13. Demands and Counteroffers
EC demanded
the two
Demanded GE companies to
to divest parts divest some of
GE proposed to of GECAS their aerospace
divest itself operations.
Merger failed from home
since GE did parts of avionic
not accept EU’s systems but
suggestions. rejected to
spinoff GECAS.
Presented By : Gouri Coming up :Repercussions Of The Failed Merger

14. Repercussions Of The
Failed Merger
• Economic situation in U.S.
• Political motives behind the rejection
• Invitation to retaliation
• Degrading performance of Honeywell post
failure of merger
Coming up : Conclusion
Presented By : Manish

15. CONCLUSION
Presented By : Akash

16. THANK YOU!
Your Logo