``We're working with the European Commission to resolve the issues,'' Tom Crane told Reuters by telephone from New Jersey, where AlliedSignal has its headquarters.
``We don't anticipate any other areas of our business to be affected and we don't expect this to delay the merger closing.''
The Commission previously had until later on Tuesday to give its verdict on the deal which was filed for clearance in the EU on July 15.
Market analysts speculated when the acquisition was announced that the companies' overlap in the avionics market, which includes flight safety systems and cockpit displays, could pose regulatory concerns.
The firms' main clients are Boeing Co and European aviation consortium Airbus Industrie. France's Sextant Avionique and Rockwell International Corp are their main competitors.
A merged AlliedSignal/Honeywell would manufacture a vast range of products including thermostats, security systems, bulk pharmaceuticals, auto filters, body armor and antifreeze.
But aerospace systems would constitute its largest single unit combining Allied's leading flight safety business and other aerospace offerings with Honeywell's space and aviation segment, creating a powerhouse in avionics.
At the end of 1997 the Commission approved French subsidies to help Sextant and Smiths Industries Plc of Britain develop a flight management system to equip new Airbus planes of the A320, A330 and A340 families.
It specifically said this would allow Airbus to reduce its dependence on Honeywell, which had a virtual monopoly on its flight navigation systems.
The Commission's reasoning triggered a challenge by Honeywell to the European Court of Justice in Luxembourg which is still pending.
The subsidy issue is separate from the EU review of the merger with AlliedSignal, which is also being investigated in the United States, where the Justice Department recently asked the firms to supply more information.
EU and U.S. competition authorities usually cooperate on reviews of big corporate mergers and acquisitions.
The companies have said they expect to complete the merger in the autumn.
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