AlliedSignal, Honeywell To Merge
AlliedSignal Inc. (Morristown, NJ) and Honeywell Inc. (Minneapolis) have signed a definitive merger agreement that will create a global technology company with revenues of $25 billion and combined market capitalization in excess of $45 billion. The combined company will be called Honeywell and will be headquartered in Morristown, NJ.
Under the terms of the agreement, each share of Honeywell common stock will be exchanged for 1.875 shares of AlliedSignal common stock. Based on 126 million Honeywell shares outstanding and AlliedSignal's current stock price, the transaction is valued at more than $14 billion. The new company will also assume approximately $1.5 billion of Honeywell debt. The transaction is expected to be tax-free to shareholders and will be accounted for as a pooling of interests.
Lawrence Bossidy, chairman and CEO of AlliedSignal, will be the new company's chairman and will focus on integrating the two companies. Michael Bonsignore, chairman and CEO of Honeywell, will be the new company's CEO. The board of directors of the new company will include nine members from the current AlliedSignal board and six members from the current Honeywell board. Upon Bossidy's retirement on April 1, 2000, Bonsignore will become chairman.
The combined company will have a work force of more than 120,000 employees after integration, reflecting the elimination of approximately 2,000 jobs within the first six months after closing and approximately 2,500 additional job reductions in the following year. Although Honeywell's Minneapolis headquarters offices will be closed, the new company will continue to have over 6,000 employees in the Twin Cities area.
The deal, which is expected to close in the fourth quarter of 1999, is subject to approval by shareholders, regulatory authorities, and customary closing conditions.
AlliedSignal Inc. is an advanced technology and manufacturing company serving customers with aerospace and automotive products, specialty chemicals, performance fibers, plastics and advanced materials.
Honeywell is a producer of control technologies for buildings, homes, industry, space, and aviation.
For more information, call Honeywell at 612-951-1000.