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AlliedSignal And Honeywell Reach Agreement In PrincipleFor Merger Clearance With U.S. Department Of Justice
MORRIS TOWNSHIP, N.J. and MINNEAPOLIS---AlliedSignal Inc. and Honeywell Inc. announced today that they expect the U.S. Department of Justice (DOJ) not to challenge their proposed merger, subject to final entry of a consent decree requiring the divestiture of portions of their respective avionics businesses.
The companies said the divestitures would represent only about 1% of the combined company's overall revenues and would not have a significant impact on its future earnings. Specifically, Honeywell will divest its TCAS (Traffic Alert and Collision Avoidance System) business, while AlliedSignal will divest its search and surveillance weather radars, space and navigation business, Cheshire, Connecticut operations and MEMS microSCIRAS technology. These areas accounted for approximately $250 million in 1998 revenues.
"From the outset, we have been confident that there are no insurmountable antitrust issues related to our merger,'' said Lawrence A. Bossidy, AlliedSignal's Chairman and Chief Executive Officer. "Now that we have reached an agreement in principle with the DOJ, we can focus our efforts on completing the European Commission's Phase II review, which we continue to believe can be completed in time to close the merger in the fall. The divestitures will not delay or disrupt the integration process.''
Michael R. Bonsignore, Honeywell's Chairman and Chief Executive Officer, said, "Today's agreement with the U.S. Department of Justice brings us to the final stage for completion of this important merger. Our integration plans are in place and once we receive the European Commission clearance, we are ready to implement them promptly. We are confident that we will meet our cost-savings targets, and our integration teams continue to identify additional synergy opportunities.''
Bonsignore added that the integration teams also have identified cross-selling and technology-licensing opportunities outside of the aerospace businesses that will contribute to the new company's future revenue growth.
Both companies also confirmed their third-quarter earnings today. AlliedSignal said it expects third-quarter earnings per share to be $0.68, up 17% compared with 1998 third- quarter earnings per share of $0.58. Honeywell anticipates third-quarter earnings per share to be $1.28, up 12% compared with earnings per share of $1.14 for the year-earlier quarter.
AlliedSignal Inc. is an advanced technology and manufacturing company serving customers worldwide with aerospace products and services, automotive products, chemicals, fibers, plastics and advanced materials. It is one of the 30 stocks that make up the Dow Jones Industrial Average and is also a component of the Standard & Poor's 500 Index. The company employs 70,400 people in some 40 countries.
Honeywell is the world's leading provider of control technologies for buildings, homes, industry, space and aviation. The company employs 57,000 people in 95 countries and had 1998 sales of $8.4 billion.
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AlliedSignal And Honeywell Reach Agreement In PrincipleFor Merger Clearance With U.S. Department Of Justice