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HomeArticlesHoneywell Confirms Merger Discussions with United Technologies

Honeywell Confirms Merger Discussions with United Technologies

HONEYWELL says that over the past year it has engaged in discussions with United Technologies regarding a possible ‘business combination’ but industry pundits say UTC has rejected the deal. 

According to Honeywell, the value creation from a combination would be significant, including the benefits of $US3.5 billion in annualized cost synergies. Honeywell says the combination would ‘benefit customers and enhance the company's ability to offer a more comprehensive and compelling suite of technologies to serve their needs’.

According to Honeywell, the combined company's financial profile would be stronger than the highest valued peers in the multi-industry group today, creating an opportunity for incremental value for both sets of shareowners over the short and long-term. A combined Honeywell and United Technologies would maintain a strong investment grade rating, and have higher free cash flow, and a rapid deleveraging profile.

Honeywell reaffirmed that it will not pursue a transaction that is not in the best interest of their shareowners, consistent with the company's successful and disciplined capital deployment framework.

"Honeywell has built a company that is well positioned for continued global growth as a standalone company over the long-term," said Honeywell chairman and CEO, Dave Cote. "We have built a track record of strong performance that has seen us regularly meet or exceed expectations. 

“The company has delivered double-digit earnings growth for 6 consecutive years and has shown that our differentiated technologies and the diversity of opportunity in our portfolio is working, and that our process initiatives, including HOS Gold, are driving new business efficiencies and profitability,” he said. 

United Technologies Corp disclosed the merger talks with Honeywell earlier this week but said a deal would "face insurmountable regulatory obstacles."

Industry commentators says UTC is reluctant to lose profitable aerospace divisions it would need to shed to gain U.S. Government approval for the deal. ♦


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