GE is likely to appeal against the EU’s veto of its $43 billion takeover of Honeywell, not to revive the bid but, by overturning it, to protect itself against possible future allegations of abuses of its dominance of the European aeroengine market. The existence of such a veto could lead to problems with future acquisitions. Another gain from GE’s point of view is the opportunity to dispute Brussels’ claim that GE and Honeywell could have ‘bundled’ aerospace products and services to squeeze out competitors, and the necessity to do all it can to pursue its bid to the bitter end to head off legal action by Honeywell.

GE has until the end of September to file an appeal in the Court of First Instance. The appeal could be based on the facts of the case or on the Commission’s procedure.

Honeywell is still considering whether to pursue an action for damages against GE on the basis that GE did not fulfil its obligation to pursue its best efforts to complete the takeover. And although the merger has been effectively blocked altogether by the European veto, it still remains in force as an agreement until November 30. Nonetheless the unwinding process has already started, with the companies agreeing in July to waive some operational restrictions – mainly concerning job related issues, securities and assets trading – applied under the terms of the deal. Shares in both companies fell sharply at the news.