Welch to extend tenure as part of deal:
biz.yahoo.com
Sunday October 22, 1:07 pm Eastern Time
GE to buy Honeywell, Welch to stay on
By Patricia Vowinkel
NEW YORK, Oct 22 (Reuters) - General Electric Co. (NYSE:GE- news) was expected to announce on Sunday a deal to acquire aircraft electronics giant Honeywell International Inc. (NYSE:HON - news) for about $44 billion in stock, or $55.12 a share, people familiar with the situation said.
As part of the deal, John F. Welch Jr. will stay on as chairman of GE through the end of 2001, the sources said.
Welch, who turns 65 on Nov. 19, was scheduled to retire next April. GE was expected to name a No. 2 and heir apparent within the next month or two.
Representatives of Fairfield, Conn.-based GE and Morris Township, N.J.-based Honeywell declined comment on Sunday.
Honeywell is a leading maker of avionics, or aircraft electronics, as well as turbochargers, speciality chemicals and automated control systems.
GE, a leading manufacturer of aircraft engines, would gain more strength in the sector with an acquisition of Honeywell. But GE may have to make some divestitures to win the approval of antitrust regulators. Among its many interests, GE also owns financial services powerhouse GE Capital and the NBC television network.
Under the deal, GE will pay 1.055 of its shares for each of Honeywell's 801.05 million shares outstanding.
Based on GE's closing price on Friday of $52-1/4, that bid values Honeywell at $55.12 a share.
Shares of Honeywell rose $10-5/16, or nearly 29 percent, to close at $46 in regular trading on the New York Stock Exchange on Friday.
GE stock, in contrast, fell $3-3/8, or more than 6 percent, to close at $52-1/4 in regular NYSE trading on Friday.
GE made its 11th-hour bid for Honeywell on Friday, just one day after Honeywell confirmed it was in merger talks with Hartford, Conn.-based United Technologies Corp.(NYSE:UTX - news)
United Technologies had offered about $40 billion in stock, or about $50 a share before breaking off the talks on Friday after GE expressed its interest in Honeywell.
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.
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.
He apparently didn't have to think about it for long. It may have helped that he has ties with Honeywell's former Chairman Lawrence Bossidy.
A former top executive at GE, Bossidy 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. |
