USA: Honeywell says it is no longer pursuing a strategic combination with United Technologies after scrapping its most recent bid of a reported $90bn.
In a statement yesterday, Honeywell chairman and CEO Dave Cote revealed that his company has been discussing possible mergers for the last 15 years but that it is no longer pursuing a strategic combination with United Technologies due to their unwillingness to engage in negotiations.
“From both an industrial logic and shareholder value perspective, Honeywell and United Technologies are a great match and that is why the two companies have been talking about a combination for more than 15 years,” he said.
Honeywell said it was interested in a combination because it saw compelling value creation for both sets of shareholders and a readily executable transaction due to two largely complementary business portfolios.
Honeywell again stressed that it was confident that the regulatory process – UTC’s main objection – would not have presented a material obstacle to a transaction.
“We made a full and fair offer that would have greatly benefitted both sets of shareowners. Considerable value would have been added through the $3.5bn of very achievable cost synergies and application of Honeywell management practices, especially our extensive software capability and cost management that would support needed product reinvestment. It also would have created the opportunity to construct an excellent core growth portfolio,” Cote added. “However, continuing to try to negotiate with an unwilling partner is inconsistent with our disciplined acquisition process.”
Responding to Honeywell’s comments, UTC said it would remain laser focused on its key priorities – programme execution, innovation, cost reduction and disciplined capital allocation. “Our outlook remains strong and our industry-leading franchises are well positioned to deliver strong earnings growth and create shareholder value well into the future,” the company said in a statement.
Honeywell sees no obstacles in UTC merger – February 24, 2016
USA: Honeywell says it does not see the regulatory process as an obstacle to a merger with United Technologies Corporation (UTC). Read more…