AlliedSignal Nears $14bn Acquisition of Honeywell

AlliedSignal, a diversified manufacturing company, is nearing a $14 billion acquisition of Honeywell, the maker of electronic controls. The news sent Honeywell's stock soaring $9.13 on speculation of a deal, while AlliedSignal's shares fell $2 to close at $58.38. People close to the companies confirmed that talks are at an advanced stage and a formal announcement could be imminent. The potential acquisition, if successful, would see Michael Bonsignore, Honeywell's CEO, succeed Lawrence Bossidy as CEO of AlliedSignal.

Key Takeaways:

AlliedSignal is close to announcing the acquisition of Honeywell for approximately $14 billion.
Honeywell's stock leapt $9.13 on speculation, while AlliedSignal's shares fell $2 to close at $58.38.
The proposed deal would value Honeywell at as much as $14 billion.
The two companies combined would have a market capitalization of approximately $45 billion and around 127,000 staff worldwide.
Honeywell's electronics business would strengthen AlliedSignal's aerospace capabilities, combining avionics expertise with AlliedSignal's in-flight safety products and systems.
AlliedSignal's CEO, Lawrence Bossidy, supports the idea of further acquisitions before his retirement, citing the failed AMP bid as a motivation.
Financial details of the proposed transaction are unclear, but it is likely to be structured as an all-stock merger.

Statistics:

Honeywell's annual sales in 1998: $8.4 billion
AlliedSignal's annual sales in 1998: $15 billion
Potential market capitalization of AlliedSignal and Honeywell combined: approximately $45 billion
Number of staff at AlliedSignal and Honeywell combined: around 127,000
Potential value of Honeywell: as much as $14 billion
Percentage change in honeywell's stock price on speculation of the deal: +9.1%

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