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01:00 PM, February 27, 2016

Boeing has said it would take a close look at the proposed merger of Honeywell and United Technologies.

“Healthy competition in our supply chain is vitally important to Boeing and our commercial and military customers,” the company said in a statement.

“As we would with any potential combination of tier one suppliers within the aerospace and defense industry, we would anticipate taking a very close look at the potential impact on us and our customers of a Honeywell-UTC merger or acquisition,” the statement added.

The view of the US DOD are yet to be known on the proposed merger. However, in an earlier case of merger of Sikorsky with Lockheed Martin, the DOD had said it would not allow future mergers if it affected its contractors pool.

The understanding is that a shrinking contractor’s pool would lead to a monopolistic situation. This seems to be the apprehension of Boeing too as its “very close look” is most likely linked to avoiding dealing with very large suppliers without significant competition to keep price under check.

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