AlliedSignal and Honeywell Announce Merger, Creating a Global Technology Powerhouse

The announcement of a merger between AlliedSignal and Honeywell marks a significant development in the corporate world, creating a global technology powerhouse with revenue of $25bn in 1999 and a combined market capitalization of over $45bn. Lawrence Bossidy, chairman and CEO of AlliedSignal, will step down and be succeeded by Michael Bonsignore, chairman and CEO of Honeywell. The merger aims to bring together Honeywell's focus on sophisticated avionics and AlliedSignal's in-flight safety products and systems, with annual revenues of $10.5bn from aerospace and $15bn from industrial controls, home and building controls, and transportation products.

Key Takeaways:

The merger between AlliedSignal and Honeywell will create a global technology powerhouse with revenue of $25bn in 1999 and a combined market capitalization of over $45bn.
Lawrence Bossidy, chairman and CEO of AlliedSignal, will step down and be succeeded by Michael Bonsignore, chairman and CEO of Honeywell, who will serve as CEO until his retirement in April 2000.
The new company's largest business unit will be aerospace, with annual revenues of $10.5bn and combined in-flight safety products and systems from both companies.
Honeywell will be renamed AlliedSignal and will have headquarters in Morristown, New Jersey.
The merger is expected to result in annual cost savings of about $500m.
AlliedSignal will assume about $1.5bn of Honeywell's debt.
AlliedSignal shareholders will own 70% of the combined group.

Statistics:

Revenue of $25bn in 1999 for the merged company.
Combined market capitalization of over $45bn.
Annual revenues of $10.5bn from aerospace.
Annual revenues of $15bn from industrial controls.
120,000 staff in 95 countries.
$3.5bn total value of the deal (based on $14bn value of Honeywell plus $1.5bn debt).
$500m annual cost savings.
1.875 AlliedSignal shares per Honeywell share exchanged.

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