GE agrees to buy Honeywell

The General Electric Co., Fairfield, Conn., agreed to acquire Honeywell Inc., Morristown, N.J., for $45 billion in stock, plus assumed debt, in a move to bolster its aerospace, industrial systems, power and plastics businesses.

The deal, which would be the largest acquisition in GE's history, came after GE outbid United Technologies at the last minute to buy Honeywell.

"Honeywell's core group of businesses - avionics, automated controls, performance materials and its new microturbine technology - are a perfect complement to four of GE's major businesses," said Jack Welch, GE's president and CEO. "Not only are the businesses a perfect fit, but so are the people and processes. GE's operating system and social architecture, coupled with both companies' common culture based on the initiatives of Six Sigma, services, globalization and e-business are also a perfect fit."

Michael Bonsignore, chairman and chief executive of Honeywell, will take a seat on the GE board of directors along with two other Honeywell directors. The boards of directors of both companies have approved the merger agreement, which is subject to regulatory approval and the approval of Honeywell shareowners. The merger is expected to be completed in early 2001.

Jack Welch, who was expected to retire at the end of this year, recently agreed to stay on at GE one more year while the company integrates its massive proposed acquisition of Honeywell.