In less than a day since United Technologies, a widely diversified group that manufactures Otis lifts, Carrier air-conditioners, Pratt & Whitney aero-engines and Sikorsky helicopters, announced that it was close to finalising a deal with Honeywell, Mr Welch put a spanner in the works, by announcing a counter-bid to the board of directors of Honeywell. The GE offer is understood to have been faxed to the Honeywell board, just hours before it was scheduled to meet to consider the almost-$40 billion United Technologies offer. Honeywell, based in Morris Township, NJ, is a leading maker of avionics, or aircraft electronics, as well as turbochargers, speciality chemicals and automated control systems.

While United Technologies instantly terminated its negotiations with Honeywell, stating that it was unwilling to get into a bidding war, the GE offer, which could be the largest industrial takeover offer, is expected to result in a flurry of offers from industrial giants like Siemens. When contacted for a reaction, Siemens' executives are understood to have said that the German giant is studying the situation.

For GE, like United Technologies, parts of Honeywell offer a good fit. Both companies make plastics and chemicals and power generation systems. GE Aircraft Engines is a major player in wide-bodied jets and other commercial aircraft, while Honeywell's strength is in avionics and business jet engines.

What is also likely to go in GE’s favour is the fact that the two companies are a good cultural fit as well. Honeywell, formed earlier this year by the merger of Honeywell Inc and Allied Signal, had been run by Lawrence Bossidy, a former protg of Mr Welch. Both companies have implemented Six Sigma, a complex quality-control method. And, being close friends, Mr Bossidy and Mr Welch share a brusque, no-nonsense management style.

It is this closeness between the two main players that has prompted many analysts and investors to wonder if Honeywell had expected the United Technologies merger to be upended all along. Several analysts were of the opinion that Mr Bossidy, who retired from Honeywell's board on April 1 but remains a large shareholder, might have been orchestrating a bidding war.

If successful, a Honeywell deal would represent a big trophy for Mr Welch in his last year as GE's chief executive -- and pose a heavyweight management challenge for his successor.