Honeywell and United Technologies Discuss Potential Merger
Honeywell International and United Technologies Corporation, the aerospace giants, have recently held talks regarding a potential merger which would create for a $94 billion sales conglomerate. These talks have been taking place over the span of the last two weeks, and have been focusing on a deal in which Honeywell International parts would offer a premium in the form of cash and in stock, for the smaller United Technologies Corporation.
While there is no guarantee that these discussions will ultimately lead to a deal, there are significant concerns regarding the approval of an antitrust review. Honeywell International and United Technologies Corporation offer and provide such a wide range of materials and resources for the aviation and aerospace industries. It is likely that they will face opposition from other aerospace giants such as Airbus as well as Boeing. At this point, it seems as though the outcome of these talks are uncertain.
“Earlier last year, when UTX was larger in value than Honeywell, UTX CEO Greg Hayes approached his counterpart at Honeywell, David Cote, about the possibility of merging the two companies,” stated David Faber at CNBC. “Those discussions centered on a deal that represented a merger of equals, but would have had UTX management in control, according to people close to the conversations. Those talks broke down when United Technologies' stock price suffered significant declines and the two companies found themselves unable to agree on who would be in control of the combination.”
The two companies are large players in the climate control business and lead the Manufacturer of aerospace and aviation industries. Due to their market shares, it is likely that any combination would be subject to significant antitrust review in the United States as well as in Europe.
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