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United Technologies says no to Honeywell's multi-billion offer

Staff writer |
Honeywell unveiled its proposal to buy United Technologies (UTC) for $42.63 in cash plus 0.614 shares in the combined company.

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This is valuing the target’s stock at about $108 a share, using February 18 closing prices.

"The value creation from a combination is significant, including the benefits of $3.5 billion in annualized cost synergies. A combined company would have almost $100 billion in annual sales," Honeywell said.

However, United Technologies thinks the deal would be stopped: "This morning Honeywell released the details of its February 19 proposal to acquire United Technologies, and over the past few days, there has been much written and said about a possible deal. I want to take this opportunity to set the record straight on a number of issues.

"We have discussed a combination with Honeywell on-and-off for years to determine if there was a way to create shareholder value. However, after the exploratory discussions last spring it became clear that the regulatory environment had shifted dramatically during the course of 2015.

"After consultation with our legal advisors, we concluded that a combination would be blocked outright or, even if it were possible to complete a transaction, the regulatory delay, required divestitures, and customer concerns and concessions would ultimately destroy shareholder value far beyond any synergies.

"It would also have a material negative impact on UTC's operations, customer relationships and talent retention. It would be irresponsible for UTC to move forward with the proposed combination under these circumstances."

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