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To: porcupine --''''> who wrote (1678)	6/7/1999 9:17:00 AM
From: porcupine --''''>	Read Replies (2) \| Respond to of 1722

AlliedSignal To Buy Honeywell Filed at 8:48 a.m. EDT -- June 7, 1999 By The Associated Press NEW YORK (AP) -- AlliedSignal Inc. is buying Honeywell Inc. for $13.79 billion in stock, strengthening its aerospace business with the addition of Honeywell's control systems, the companies announced today. The new company will take the Honeywell name and the AlliedSignal headquarters in Morristown, N.J. Honeywell's headquarters in Minneapolis will be closed. The two companies will cut a total of 4,500 jobs, or 3.6 percent, of their combined work force. AlliedSignal makes equipment ranging from aircraft engines and collision early-warning systems, to wheels and brakes. Honeywell makes control systems for aircraft, homes and commercial buildings, such as automatic thermostats for heating. Shareholders have been watching AlliedSignal closely since December, when the company was thwarted in a hostile bid to acquire AMP Inc., a Harrisburg, Pa.-based maker of electronic connectors that was instead acquired by Tyco International. The deal, if approved by the companies' shareholders and regulatory officials, will be the swan song for Lawrence Bossidy, chairman and chief executive officer of AlliedSignal, who retires on April 1, 2000. Bossidy even hinted at it two months ago, at the company's annual meeting, when he said, ''I want to do something big in this company before I leave.'' Both companies' boards of directors have approved the deal. Bossidy, 64, will serve as chairman for the combined company until his retirement. Michael R. Bonsignore, 58, chairman and chief executive of Honeywell, will be the new company's chief executive and assume the additional title of chairman when Bossidy departs. The two companies have had on-and-off merger discussions since 1989, when Honeywell was a much weaker company. Bonsignore's turnaround of Honeywell made the company a stronger potential partner and proved to Bossidy that Bonsignore could fill his shoes. ''As I looked at Honeywell and saw what Mike had done over the last six years in improving their outlook, I got more interested,'' Bossidy said in an interview today with The Associated Press. The hardest issues to resolve, the executives said, were the company name and headquarters. Honeywell has been based in Minneapolis for 114 years, and currently employs 7,500 in the Twin Cities area. The two companies agreed to keep 6,000 jobs in the area and maintain its philanthropic commitments. For AlliedSignal, the company loses the name created in 1985 by the merger of Allied Corp. and the Signal Cos. ''They have a better worldwide brand than we did, so we made a concession on that point,'' Bossidy said. The companies expect to save $500 million within two years by integrating their research and development and purchasing. The new company will eliminate 2,000 jobs within the first six months after the deal closes and another 2,500 the following year. Rumors about the deal circulated around Wall Street late last week. On Friday, Honeywell's stock jumped $9.12 1/2 to $105 on Friday, a new one-year high, on the New York Stock Exchange, while AlliedSignal's shares dipped $2 to $58.37 1/2. Honeywell shareholders will receive 1.875 shares of AlliedSignal common stock -- worth $109.45 based on Friday's close -- for each share of Honeywell they own. AlliedSignal also will assume $1.5 billion of Honeywell's debt, but the synergies and cost savings of the combined operations are expected to add 17 cents a share to earnings of the combined companies in 2000, and 32 cents a share in 2002. Honeywell earned $572 million on sales of $8.02 billion last year. AlliedSignal made a $1.33 billion profit on sales of $15.13 billion. Copyright 1999 The New York Times Company