Art-- this article says "confirmed"...
By Patricia Vowinkel
NEW YORK, Oct 21, (Reuters) - General Electric Co <GE.N>. ,
moving with lightning speed, sealed a deal on Saturday to buy
aircraft electronics giant Honeywell International Inc <HON.N>.
sources familiar with the situation said.
It was not immediately clear how much Fairfield,
Conn.-based GE had agreed to pay.
United Technologies Corp <UTX.N>., however, had offered
about $40 billion in stock, or about $50 a share, for Honeywell
before its merger talks broke down on Friday after GE expressed
interest.
GE and Honeywell could not be reached immediately for
comment.
Honeywell, based in Morris Township, N.J., is a leading
maker of avionics, or aircraft electronics, as well as
turbochargers, specialty chemicals and automated control
systems.
GE, a leading manufacturer of aircraft engines, would gain
additional strength in the sector with an acquisition of
Honeywell, but may have to make some divestitures to win the
approval of anti-trust regulators. Among its many interests, GE
also owns financial services powerhouse GE Capital and the NBC
television network.
GE Chairman Jack Welch, who only learned late Thursday that
Honeywell was in merger talks with United Technologies,
apparently called Honeywell's board on Friday morning, to
discuss a bid just as the board was considering the United
Technologies offer.
"When you get a call from Jack Welch and he says 'Don't do
anything because I'm prepared to meet you and top the bid', you
don't have to wonder if he's serious," one source said.
"No one is going to say 'You're not serious; you can't do
it," he said. And, he noted, the Honeywell board would have a
fiduciary duty to its shareholders to consider the offer.
Shares of Honeywell rose $10-5/16 or nearly 29 percent, to
close at $46 in regular trading on the New York Stock Exchange,
giving the company a market capitalizations of about $36
billion.
Shares of GE fell $3-3/8, or more than 6 percent, to close
at $52-1/4 in regular trading on the New York Stock Exchange on
Friday.
GE's 11th hour offer on Friday came just one day after
United Technologies and Honeywell confirmed they were in merger
talks.
United Technologies had offered 0.74 of a share of its
stock for each of Honeywell's 801 million shares outstanding,
according to people familiar with the situation.
The proposed deal valued Honeywell at about $40 billion, or
$50.32 a share, in stock. But United Technologies shares fell
sharply in trading on Friday, reducing the value of the bid to
about $36 billion, or about $45 a share.
CNBC, an affiliate of General Electric, first reported the
talks between United Technologies and Honeywell late Thursday
afternoon and then broke the news to Welch, who was on the
floor of the New York Stock Exchange at the close of trading.
When told of the talks between United Technologies and
Honeywell, Welch expressed surprise and told CNBC he would have
to think it over.
Welch, who turns 65 on Nov. 19 and is scheduled to retire
next April, apparently didn't have to think about it for long
and it may have helped that he has ties with Honeywell's former
Chairman, Lawrence Bossidy.
Bossidy, a former top executive at GE, was chairman and
chief executive of Allied Signal when the company agreed in
June 1999 to acquire Honeywell.
The combined company retained the name Honeywell and he
stayed on as chairman until April 2000. |
