The Failed GE-Honeywell Merger: What Should Jack Welch Do?

What options does Jack Welch have regarding the failed merger with Honeywell?

A. Agree to the European Commission's conditions
B. Apply political pressure
C. Call off the deal entirely

Answer:

Jack Welch has three options: agree to the European Commission's conditions, apply political pressure, or call off the deal entirely.

In this scenario, Jack Welch, the CEO of General Electric (GE), is facing a decision regarding the failed merger with Honeywell. The European Commission has imposed conditions on the approval of the merger, requiring GE to divest parts of its avionics or aircraft leasing businesses. Welch has several options to consider:

A. Agree to the European Commission's conditions: Welch could choose to agree to the conditions set by the European Commission and proceed with the merger after divesting the specified businesses. This option would allow the merger to move forward, albeit with some changes to GE's operations.

B. Apply political pressure: Another option for Welch is to apply political pressure to negotiate more favorable terms with the European Commission. By leveraging his connections and influence, Welch may be able to secure a better deal that aligns more closely with GE's interests.

C. Call off the deal entirely: The final option available to Welch is to call off the deal completely and explore other opportunities. This decision would involve walking away from the merger with Honeywell and pursuing alternative strategies for growth and expansion.

Ultimately, the decision will depend on the potential benefits of the merger, the strategic importance of the avionics or aircraft leasing businesses for GE, and the feasibility of meeting the European Commission's conditions. It's crucial for Welch to carefully weigh the pros and cons of each option before making a final choice.