IS HIS last—and biggest—deal in peril? The European Commission's decision on February 27th to open a full-scale antitrust inquiry into GE's $40 billion takeover of Honeywell was not unexpected, but will nonetheless be a big disappointment to Jack Welch, GE's boss.

Mr Welch postponed his retirement to get this deal done. He had scoffed at the idea that the combined might of the two companies in civil aerospace might invite scrutiny from Europe's competition police. The takeover, announced last October, would, he declared, be wrapped up by the end of February. Now, he will be lucky to close it by July. Worse, the conditions that Brussels may attach to the deal could be enough to make him wonder about its value.

The very things that made buying Honeywell seem like a good idea to GE are also keeping Mario Monti, the EU's competition tsar, awake at night. For Mr Welch, “GE is buying a high-tech company with 90% overlap with the things we already do.” For Mr Monti, the danger is that GE-Honeywell will be able to use the muscle it gets from a range of related products to squeeze rivals out of the market. It was this theory, known as the “portfolio effect”, that Mr Monti invoked to impose divestitures after the Exxon-Mobil and Honeywell-Allied Signal mergers.

What seems to be worrying Mr Monti most is the relationship between GE's aero-engine business, all the other aviation gear that Honeywell brings with it (avionics, small jet engines, undercarriages, auxiliary power units, brakes), and GECAS, GE Capital's powerful aviation-leasing arm. GECAS owns 750 planes and looks after a further 300. It has huge clout in the market and could use it to force plane makers to buy the complete package of GE-Honeywell kit. Nonsense, GE says, GECAS planes have a wide variety of engines and we wouldn't dream of dictating to aircraft makers how they specify their products.

The trouble is that GE's rivals, such as Rolls-Royce and United Technologies, and Honeywell's competitors, which include BAE Systems and Thales, are unwilling to take Mr Welch's assurances of future fair play on trust. Ideally, they would like to see GE and GECAS sever their links. That would be a deal-breaker for Mr Welch and is probably more than Mr Monti will ask for. But the deal is unlikely to be cleared for take-off without some painful disposals. This is not how Mr Welch wanted to bow out.