Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Honeywell abandons $90.8B bid for United Technologies, (Mar 1, 2016)
Organizations Mentioned:Honeywell International, Inc. | United Technologies Corp. | United Technologies Corporation
By Linda O’Brien, J.D., LL.M.
Honeywell International is no longer pursuing a proposed acquisition of aircraft supplier United Technologies Corporation (UTC), after UTC expressed its unwillingness to engage in negotiations, Honeywell announced today. Honeywell was interested in the acquisition “because we saw compelling value creation for both sets of shareholders and a readily executable transaction due to two largely complementary business portfolios,” said the company’s Chairman and Chief Executive Officer David Cote.
The companies first began discussions of a potential combination in May 2011 and again in April 2015. “Both companies have agreed in the recent past that the industrial logic was compelling in a very doable transaction,” according to Cote. However, after Honeywell released the details of its proposed $90.3 billion acquisition of UTC, UTC President and Chief Executive Officer Gregory Hayes issued a press release, stating that any merger with Honeywell would face insurmountable regulatory challenges in the United States, European Union, China, Brazil, and Canada, as well as undermine shareholder value.
Cote responded that Honeywell strongly disagrees with United Technologies' characterization of the regulatory and customer risks associated with the transaction. The company remains confident that the regulatory process 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,” observed Cote. “Considerable value would have been added through the $3.5 billion 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. However, continuing to try to negotiate with an unwilling partner is inconsistent with our disciplined acquisition process.”
Based in Morris Plains, New Jersey, Honeywell is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes, and industry; turbochargers; and performance materials.
Companies: United Technologies Corporation; Honeywell International, Inc.
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