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GE-Honeywell woes grow
June 12, 2001: 6:34 a.m. ET

EC regulators said to seek aerospace unit divestiture as merger condition
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NEW YORK (CNNfn) - Europe's antitrust regulators are pressing General Electric Co. to sell more than half of Honeywell International Inc.'s aerospace division, the unit that drove GE to seek to acquire the company, a published report said.

A person close to GE (GE: Research, Estimates) said the European Commission's Merger Task Force is asking for divestitures of $6 billion a year in revenue from the unit, which produces $10 billion of the company's $25 billion annual revenue, the Wall Street Journal reported.

The commission also has targeted some of Honeywell's (HON: Research, Estimates) most prized products such as ground-proximity warning systems, collision-avoidance devices, corporate jet engines and units that produce communication and navigation equipment.

GE's negotiators are set for further discussions Tuesday with the European Commission. The company has until Thursday to come up with a package of antitrust concessions. The final decision on the proposed merger will come no later than July 12.

GE shares ended down 74 cents at $47.40 Monday. Honeywell shares fell $1.26 to $45.25. Both companies are components of the Dow Jones industrial average. graphic