Although Honeywell attempted to rally support from investors and analysts with a by proposing a merger that would generate $39 billion in value to United Technologies shareholders and over$72 billion in value for investors, Gregory Haynes, United Technologies CEO, responded with “Not going to happen.” In Antoine Gara, Forbe’s staff writer’s article entitled “Honeywell Unveils Merger Bid For United Technologies In Effort To Rally Wall Street”, he examines Honeywell’s CEO David Cote’s presentation of the benefits of the merger. His final analyses was that a friendly negotiation depends upon agreements of both boards on antitrust concessions and tweaks to cash and stock offers. According to CNBC, the deal was seen as a merger of equals but due to Honeywell’s stock price performance and United Tech’s declining shares, it now resembles an unfriendly takeover. Haynes voiced a reluctance to risk United Technologies being placed in the same circumstances as Honeywell when it was taken over by Cote in 2002.
Honeywell accepted a takeover bid for General Electric in 2000 while it was valued at $21 billion and the American Department of justice cleared the merger, but in 2001 the European Commission blocked it on the grounds that the merger would create a horizontal monopoly. With the firing of then CEO Michael Bonsignore, current CEO and Chairman, David Cote was appointed and Honeywell has since made over 80 acquisition, 60 divestures, added $12 billion in new sales and increased the work force by 131,000. As a result Honeywell stock has tripled between 2002 and 2015. The question posed in this article is whether rising global economic fears and volatility in the US stock markets will be positive or negative to Honeywell. According to Cote’s presentation, the merger would generate $3.5 billion in cost synergies annually and involve $36 billion in new debt financing. The math used was compared to the optimism used in now- stalled bid for Norfolk Southern by Canadian Pacific. The merger proposal by Honeywell would combine the two largest aerospace and electronic companies in the nation and result in better diversified company in geography and business mix that would be more impervious to global economic conditions.
Despite the inertia of the two deals mentioned, Madison Street Capital, the international investment banking firm that provides financial opinions to publicly and privately held businesses and corporate financial advisory and valuation service, 2016 is expected to be a record year for Hedge Fund Mergers and Acquisitions. Madison Street Capital has offices in North America, Asia and Africa and provides a variety of financial service for those looking for acquisitions and seeking lending. The knowledge, expertise and experience offered by Madison Street Capital has been recognized by the M&A Advisor who awards those with excellence in deal making, restructuring and financing. Madison Street Capital is know for its integrity, high standards and professionalism and include domestic and global investment banking, mergers and acquisitions, financial opinions, restructuring, capitol raising and specialized advice to hedge fund and other asset managers. It strives to meet the unique needs of middle market businesses in various industries.