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GE, Honeywell waive rules
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July 17, 2001: 2:30 p.m. ET
GE considering appeal of EU's block of $42B Honeywell takeover
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NEW YORK (CNNfn) - Honeywell International Inc. and General Electric Co. both agreed Tuesday to waive certain restrictions of their $42 billion merger agreement to allow each company to engage in selected activities.
The consent covers acquisition or sale of assets, employment-related issues and the issuance or acquisition of securities. The companies can engage in these activities without violating their merger pact, preserving the parties' rights under the agreement struck last year.
GE's failed $42 billion buy of Honeywell was a pooling transaction that restricted the companies' behavior, particularly regarding acquisitions, a spokesman said. The merger agreement is still in force until Nov. 30 when either party can terminate it.
Fairfield, Conn.-based GE, along with its finance arm, GE Capital, has averaged 100 acquisitions each year for the past four years. "We've been doing acquisitions all along," GE spokesman Gary Sheffer said. "Now we can do bigger deals in excess of certain dollar amount."
Honeywell (HON: down $0.44 to $35.65, Research, Estimates) declined to comment.
Earlier this month, the European Union officially rejected GE's planned acquisition of Honeywell International (HON: down $0.44 to $35.65, Research, Estimates), the first time a proposed merger between two U.S. companies has been blocked solely by European regulators.
Sheffer declined to comment on whether GE has planned any acquisitions similar to its planned buy of Honeywell. "This just gives us the freedom to conduct certain business activities as we normally would," he said.
But GE is considering appealing the EU's rejection of its Honeywell takeover and is currently in discussions with its legal advisors, Sheffer said.
It is unknown whether Honeywell will sue over the failed merger. A Honeywell spokesman declined to comment. 
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