General Electric Co. (GE) has agreed to acquire Honeywell International Inc. in a tax-free merger valued at US$45 billion plus debt – the largest acquisition in GE’s corporate history, GE announced late Sunday.
The deal, which has been agreed by the boards of both companies, would see Honeywell shareholders receive 1.055 shares of GE stock for each share they own in Honeywell, GE said in a statement. The deal is to be completed in early 2001; GE said it expects the acquisition to lead to double-digit growth in company earnings per share in the first full year, excluding any one-time charges.
After the deal is complete, Honeywell chairman and CEO Michael Bonsignore and two as-yet unnamed Honeywell executives will join GE’s board of directors. GE said it plans to use the “GE-Honeywell” brand name in some key product lines.
Jack Welch, CEO of GE, has agreed to stay on at the company until the merger is complete – he had originally planned to retire in April 2001.
Announcement of the GE deal comes days after Honeywell announced talks with United Technologies Corp. regarding a merger were over.
In a statement issued on Friday, the company said: “Honeywell today confirmed that United Technologies has terminated its merger discussions with Honeywell, and that Honeywell is considering alternative proposals. Honeywell said it would not comment further at this time.” The company confirmed the discussions with United Technologies, just one day earlier, on Thursday.
New Jersey-based Honeywell is a diversified technology and manufacturing company with strengths in business areas from avionics and power systems to automated control systems and chemicals and materials. The company operates in 95 countries and employs 120,000 people although is dwarfed by GE which employs 340,000 people in more than 100 countries and has anticipated current year revenues of US$130 billion – around six times those of Honeywell.