The Commission said preliminary investigations showed potential competition concerns regarding the markets for engine controls and AC power generators.

The parties would have very high combined market shares in these areas, the EU's competition watchdog said.

The Commission said it also had concerns about the removal of Goodrich as an independent supplier of fuel nozzles and engine controls, as well as in the area of aftermarket services.

The Commission now has 90 working days, until 9 August 2012, to take a final decision on whether the proposed transaction would reduce effective competition in the European Economic Area, it said.

"The aviation equipment industry is already concentrated and is characterized by high barriers to entry," said Joaquín Almunia, the EU's competition regulator.

"We need to make sure that competition is preserved and incentives to innovate remain," he said in a statement. "We must also prevent a rise in input prices for aircraft and engine manufacturers as well as other aviation equipment suppliers."

UTC intends to acquire the whole of Goodrich for a purchase price of $18.4 billion, in one of the largest transactions in the aerospace industry in recent years, the Commission said.

(Reporting By Sebastian Moffett)

• A Permanent Economic Emergency