For GE, Smiths is the new Honeywell. There are plenty of people in both those companies (and more significantly, some now not in them) who would rather consign the whole ghastly memory of the failed GE-Honeywell merger of 2001 to a dark corner. But, thanks to the European Court of Justice, this time around, things should be different.
The GE/Honeywell affair was one of the most extraordinary events in contemporary aerospace history. A $41 billion acquistion (by Jack Welch's GE) that pleased most of their customers, appalled their competitors (including Rolls-Royce which fought it in the courts), and finally was struck down by mild-mannered EU Competition Commissioner "Super Mario" Monti.
It was pure theatre. From the moment that the buccanneering Welch swooped on Honeywell to snatch a virtually done-deal from under the nose of arch-rival UTC, to his final legendary conversation with Monti, each week seemed to bring another incredible twist.
At one point GE offered to sell one-fifth of its hugely successful GECAS leasing unit (but not to UTC/Pratt & Whitney or Rolls-Royce) to satisfy Monti. And there was Boeing vice-chairman Harry Stonecipher's public apology to Airbus CEO Noel Forgeard at the Paris Airshow after he wrongly accused Airbus of trying to block the deal. European journalists sat in grinning rows as Boeing's iron-man ground out the words at a press conference. Not a nice thing...schadenfreude.
Within months Welch was gone. But GE, as ever, was playing a long game and, despite having no intention of reviving the merger, appealed against the ruling. In December 2005 it lost the battle, but the detail of the court's judgement transformed the battleground on which the M&A war is now being fought.
In its ruling it explicitly dismissed many of the grounds for the original decision - crucially, including the European Commission's arguments against "bundling" - the idea of gaining an unfair advantage by acquiring a portfolio of products that could let one player use bundled pricing to provide more and more parts of any new aircraft.
That matters hugely, because Smiths' product line-up is heavily biased towards supplying OEMs like airframers. At the time of the Honeywell deal, for example, GE had won the engine deal for the Embraer 170 and there was much talk of what Honeywell kit it could bundle into that if the merger went through.
On the A350 XWB and the new narrowbody programmes to come, that will be very important. I don't think the courts will intervene this time.
