The European Commission (EC) has opened an in-depth investigation into the proposed acquisition of Goodrich Corp. by United Technology Corp. (UTC) after its preliminary investigation indicated potential competition concerns, the EC said Tuesday.

UTC announced its intent to buy Goodrich in September 2011 for $16.5 billion (ATW Daily News, Sept. 23, 2011).

The EC said it is concerned that removing Goodrich as an independent supplier of fuel nozzles and engine controls, especially for smaller engines, “could result in higher input prices for engine manufacturers competing with [UTC's engine subsidiary] Pratt & Whitney. In particular, switching suppliers could take a long time and be costly for those currently sourcing from Goodrich.”

It also has concerns in the area of aftermarket services. “The aviation equipment industry is already concentrated and is characterized by high barriers to entry. We need to make sure that competition is preserved and incentives to innovate remain. We must also prevent a rise in input prices for aircraft and engine manufacturers as well as other aviation equipment suppliers,” EC VP-Competition Joaquin Almunia said.

The Commission now has until Aug. 9 to make a final decision on whether the proposed transaction would reduce competition in the European Union.