GE Weighing an Appeal of EU Decision

General Electric Co. plans to appeal the European Union’s decision to block its $41-billion merger with Honeywell International Inc., a source said Wednesday.

An appeal would not be aimed at reversing the European Commission’s rejection of the merger. Instead, GE wants to refute the commission’s finding that GE has a dominant position in the jet engine market, the source said, requesting anonymity.

That ruling, if allowed to stand, could make it difficult for GE to make other acquisitions.

The New York Times carried a similar report, citing unidentified executives close to the company, in its Wednesday editions.

GE spokesman Gary Sheffer said “we are still considering our options” regarding the appeal.

The EU announced July 3 it was blocking the GE-Honeywell merger, the first time it bore sole responsibility for stopping an all-American deal.

GE has until the end of September to file an appeal at the Court of First Instance in Luxembourg, a court spokeswoman said, adding that none had been received yet. If GE loses there, it then can go to the European Court of Justice, also in Luxembourg.

The court has never annulled a merger prohibition since the EU began reviewing them under its current laws a decade ago. Of six merger prohibitions appealed, three have been upheld and the others are pending, including last year’s WorldCom-Sprint deal, which was blocked on both sides of the Atlantic.

Antitrust lawyers complain that the European courts act too slowly to save deals, but say appeals still can be valuable in clarifying legal issues.

GE shares fell 70 cents to close at $42.80 on the New York Stock Exchange.