Exhibit 99.1
Contacts:
Tom Crane Melissa Young
973-455-4732 612-951-0773
AlliedSignal-Honeywell Merger Receives Clearance From
European Commission; Will Close Merger Later Today To Launch
New $24-Billion Technology Leader Called Honeywell
Cost-Savings Estimate Raised To $750 Million From $500
Million In 2002; First-Year Cost Savings Expected To Be $250
Million; Company Anticipates Incurring Charge Of $850
Million To $950 Million
Annual EPS Growth Expected To Be 20% In 2000 And To Grow At
Compounded Annual Rate Of At Least 18% Over Next Three
Years; Free Cash Flow Before Dividends Expected To Be $3
Billion In 2002
Integration Process Underway With Completion Slated For Mid-
Year 2000; Leadership Team Driving Integration
MORRIS TOWNSHIP, New Jersey and MINNEAPOLIS, Minnesota,
(December 1, 1999) -- AlliedSignal Inc. and Honeywell Inc.
announced today that they have received clearance from the
European Commission to complete their merger. The companies
said they plan to complete the merger today after the close
of trading on the New York Stock Exchange, marking the
historic launch of a new $24-billion global technology
company operating under the Honeywell name.
The new company's stock will commence trading under the
symbol HON on December 2 on the New York Stock Exchange.
The stock also will trade on the London, Chicago and Pacific
stock exchanges.
"Today is an exciting day for the shareowners,
employees and customers of the new Honeywell," said Lawrence
A. Bossidy, Chairman of the new Honeywell. "We are
embarking on a wonderful journey as a newly minted global
technology powerhouse. The new Honeywell is a broader and
more resilient company, possessing the efficiency, diversity
and durability to generate consistent earnings performance
and growth."
The merger will be immediately accretive to earnings,
with earnings per share expected to grow by 20% in 2000 and
at a compounded annual rate of at least 18% over the next
three years. Annual operating margin is expected to grow at
least one point per year from 14% in 1999, and free cash
flow before dividends is expected to be $3 billion in 2002.
Honeywell will have an annual revenue-growth goal of 8% to
10%.
Michael R. Bonsignore, the new company's Chief
Executive Officer, said, "We are poised to deliver on all of
our commitments, making the new Honeywell a great company to
do business with, invest in and work for. We have a proven
Six Sigma productivity engine, which enables us to pursue
exciting prospects for future revenue growth through a wider
range of products and integrated solutions offerings and
through the critical mass the combined company has gained in
Europe and Asia."
The European Commission did not ask the companies to
make any divestitures beyond those called for in the
companies' agreement in principle with the U.S. Department
of Justice (DOJ).
Integration Teams Find Additional Cost Savings
Honeywell has raised the previously announced cost-
savings estimate for 2002 to $750 million from $500 million.
The integration teams have found additional opportunities
for cost savings primarily through the combining of the
companies' global infrastructures, implementing the shared
services concept, which includes the consolidation of
information systems, and leveraging the combined company's
purchasing strength.
The company estimates that there will be a charge of
approximately $850 million to $950 million related to the
merger integration and other restructuring actions.
"We will perpetuate a broad and far-reaching Six Sigma
discipline throughout the new Honeywell to create added
value for our shareowners and our customers," Bonsignore
added. "We are training 240 Six Sigma Black Belts who will
immediately begin work in the original Honeywell businesses,
and we plan to add an additional 260 Black Belts to our
total population of more than 3,000 to work throughout our
businesses in 2000."
With the merger's closing, Bossidy noted that the
integration process is now on an accelerated timetable. "We
have spent the past five months developing comprehensive
integration plans and will now swiftly implement them across
the new company," Bossidy said. "We expect to complete the
bulk of our integration activities by mid-year 2000."
Revenue Synergies And Growth Opportunities
Bonsignore said the company has identified
opportunities to achieve significant revenue synergies by
2002. "The integration planning teams have done a terrific
job in identifying synergies across the company that will
enable us to meet our commitments," he added.
Honeywell is pursuing a variety of revenue growth
opportunities. One example is the emerging free-flight
system in the aviation industry. The free-flight system
will lead to more on-time flights, less airway congestion
and lower operating costs for airlines by enabling aircraft
to use travel routes outside of traditional airways.
The company is leading a team of avionics companies
working with the FAA to develop the software that will serve
as the backbone of the free-flight communications system.
The free-flight market is expected to be a $10-billion
industry, and the company's broad range of avionics products
and integrated systems will play an important part in the
free-flight system.
A number of key growth opportunities also exist in the
area of e-business. Examples include MyPlant.com
(www.myplant.com), which provides customers with easy access
to a broad range of the company's and third-parties' process
industry solutions. "MyPlant.com and other e-business
initiatives are leveraging the powerful connectivity
advantages of the Internet to give our global customers fast
and easy access to best-in-class technologies that can
significantly improve their operations," Bonsignore said.
Overall, he added that the new company is well
positioned for both short- and long-term growth, with more
than 75% of its products leading their respective industries
and most having superior technological positions. Many of
these product offerings lead to significant service revenues
beyond the original sale. The company's broad services and
solutions portfolio includes more than 10,000 patents and
proprietary solutions.
Leadership
The new company's leadership group, which was announced
on June 7 of this year, has been driving the integration
process. Robert D. Johnson, formerly President and CEO of
AlliedSignal's Aerospace business, and Giannantonio Ferrari,
formerly Honeywell's President and Chief Operating Officer,
are the new company's two Chief Operating Officers. Johnson
is responsible for the company's aerospace operations, which
have combined annual revenues of about $10 billion. Ferrari
is responsible for the remaining diversified businesses,
which have combined annual revenues of approximately $14
billion.
Other leadership members include Peter Kreindler,
Senior Vice President and General Counsel; James Porter,
Senior Vice President, Information Systems and Business
Services; Donald Redlinger, Senior Vice President, Human
Resources and Communications; and Richard Wallman, Senior
Vice President and Chief Financial Officer. Ray Stark, Vice
President, Six Sigma and Productivity, will continue to lead
the merger integration process in addition to overseeing the
company's Six Sigma and productivity initiatives.
New Board Of Directors
Honeywell's new 15-member Board of Directors comprises
nine members from the AlliedSignal Inc. Board and six
members from the Honeywell Inc. Board. They are:
Lawrence A. Bossidy, Chairman of the Board, Honeywell
Michael R. Bonsignore, Chief Executive Officer, Honeywell
Hans W. Becherer, Chairman and CEO, Deere and Company
Gordon M. Bethune, Chairman and CEO, Continental Airlines, Inc.
Marshall N. Carter, Chairman and CEO, State Street Corporation
Ann M. Fudge, Executive Vice President, Kraft Foods, Inc.
James J. Howard, Chairman, President and CEO, Northern States Power Company
Bruce Karatz, Chairman, President and CEO, Kaufman and Broad Home Corporation
Robert P. Luciano, retired Chairman and CEO, Schering-Plough Corporation
Russell E. Palmer, Chairman and CEO, Palmer Group
Jaime Chico Pardo, CEO, Telefonos de Mexico, S.A. de C.V (TELMEX)
Ivan G. Seidenberg, Chairman and CEO, Bell Atlantic Corporation
Andrew C. Sigler, retired Chairman and CEO, Champion International
Corporation
John R. Stafford, Chairman, President and CEO, American Home Products
Corporation
Michael W. Wright, Chairman, President and CEO, SUPERVALU INC.
Effect Of The Merger
The all-stock merger is tax free to shareholders,
except for cash paid in lieu of fractional shares. Each
share of the Honeywell Inc. stock is being exchanged for
1.875 shares of the new Honeywell, formerly named
AlliedSignal Inc. Based on 128 million former Honeywell
shares outstanding and the closing price of AlliedSignal's
shares ($60) on November 30, 1999, the transaction is valued
at more than $14 billion. When all of the former Honeywell
shares are exchanged, the new company will have
approximately 793 million shares outstanding with a market
capitalization in excess of $47 billion. The merger is
being accounted for as a pooling of interests.
Honeywell is a US$24-billion diversified technology and
manufacturing leader, serving customers worldwide with
aerospace products and services; control technologies for
buildings, homes and industry; automotive products; power
generation systems; specialty chemicals; fibers; plastics;
and electronic and advanced materials. The company employs
approximately 120,000 people in 95 countries. Honeywell is
traded on the New York Stock Exchange under the symbol HON,
as well as on the London, Chicago and Pacific stock
exchanges. It is one of the 30 stocks that make up the Dow
Jones Industrial Average and is also a component of the
Standard & Poor's 500 Index. Additional information on the
company is available on the Internet at:
http://www.honeywell.com.
This release contains forward-looking statements as defined
in Section 21E of the Securities Exchange Act of 1934,
including statements aboutfuture business operations,
financial performance and market conditions. Such forward-
looking statements involve risks and uncertainties inherent
in business forecasts. For a detailed discussion of the
company's forward-looking statements and the risks and
uncertainties associated with such statements, please see
page 15 of the company's joint proxy statement/prospectus
dated July 23, 1999, filed with the SEC.
# # #
Contacts:
Tom Crane Melissa Young
973-455-4732 612-951-0773
AlliedSignal-Honeywell Merger Receives Clearance From
European Commission; Will Close Merger Later Today To Launch
New $24-Billion Technology Leader Called Honeywell
Cost-Savings Estimate Raised To $750 Million From $500
Million In 2002; First-Year Cost Savings Expected To Be $250
Million; Company Anticipates Incurring Charge Of $850
Million To $950 Million
Annual EPS Growth Expected To Be 20% In 2000 And To Grow At
Compounded Annual Rate Of At Least 18% Over Next Three
Years; Free Cash Flow Before Dividends Expected To Be $3
Billion In 2002
Integration Process Underway With Completion Slated For Mid-
Year 2000; Leadership Team Driving Integration
MORRIS TOWNSHIP, New Jersey and MINNEAPOLIS, Minnesota,
(December 1, 1999) -- AlliedSignal Inc. and Honeywell Inc.
announced today that they have received clearance from the
European Commission to complete their merger. The companies
said they plan to complete the merger today after the close
of trading on the New York Stock Exchange, marking the
historic launch of a new $24-billion global technology
company operating under the Honeywell name.
The new company's stock will commence trading under the
symbol HON on December 2 on the New York Stock Exchange.
The stock also will trade on the London, Chicago and Pacific
stock exchanges.
"Today is an exciting day for the shareowners,
employees and customers of the new Honeywell," said Lawrence
A. Bossidy, Chairman of the new Honeywell. "We are
embarking on a wonderful journey as a newly minted global
technology powerhouse. The new Honeywell is a broader and
more resilient company, possessing the efficiency, diversity
and durability to generate consistent earnings performance
and growth."
The merger will be immediately accretive to earnings,
with earnings per share expected to grow by 20% in 2000 and
at a compounded annual rate of at least 18% over the next
three years. Annual operating margin is expected to grow at
least one point per year from 14% in 1999, and free cash
flow before dividends is expected to be $3 billion in 2002.
Honeywell will have an annual revenue-growth goal of 8% to
10%.
Michael R. Bonsignore, the new company's Chief
Executive Officer, said, "We are poised to deliver on all of
our commitments, making the new Honeywell a great company to
do business with, invest in and work for. We have a proven
Six Sigma productivity engine, which enables us to pursue
exciting prospects for future revenue growth through a wider
range of products and integrated solutions offerings and
through the critical mass the combined company has gained in
Europe and Asia."
The European Commission did not ask the companies to
make any divestitures beyond those called for in the
companies' agreement in principle with the U.S. Department
of Justice (DOJ).
Integration Teams Find Additional Cost Savings
Honeywell has raised the previously announced cost-
savings estimate for 2002 to $750 million from $500 million.
The integration teams have found additional opportunities
for cost savings primarily through the combining of the
companies' global infrastructures, implementing the shared
services concept, which includes the consolidation of
information systems, and leveraging the combined company's
purchasing strength.
The company estimates that there will be a charge of
approximately $850 million to $950 million related to the
merger integration and other restructuring actions.
"We will perpetuate a broad and far-reaching Six Sigma
discipline throughout the new Honeywell to create added
value for our shareowners and our customers," Bonsignore
added. "We are training 240 Six Sigma Black Belts who will
immediately begin work in the original Honeywell businesses,
and we plan to add an additional 260 Black Belts to our
total population of more than 3,000 to work throughout our
businesses in 2000."
With the merger's closing, Bossidy noted that the
integration process is now on an accelerated timetable. "We
have spent the past five months developing comprehensive
integration plans and will now swiftly implement them across
the new company," Bossidy said. "We expect to complete the
bulk of our integration activities by mid-year 2000."
Revenue Synergies And Growth Opportunities
Bonsignore said the company has identified
opportunities to achieve significant revenue synergies by
2002. "The integration planning teams have done a terrific
job in identifying synergies across the company that will
enable us to meet our commitments," he added.
Honeywell is pursuing a variety of revenue growth
opportunities. One example is the emerging free-flight
system in the aviation industry. The free-flight system
will lead to more on-time flights, less airway congestion
and lower operating costs for airlines by enabling aircraft
to use travel routes outside of traditional airways.
The company is leading a team of avionics companies
working with the FAA to develop the software that will serve
as the backbone of the free-flight communications system.
The free-flight market is expected to be a $10-billion
industry, and the company's broad range of avionics products
and integrated systems will play an important part in the
free-flight system.
A number of key growth opportunities also exist in the
area of e-business. Examples include MyPlant.com
(www.myplant.com), which provides customers with easy access
to a broad range of the company's and third-parties' process
industry solutions. "MyPlant.com and other e-business
initiatives are leveraging the powerful connectivity
advantages of the Internet to give our global customers fast
and easy access to best-in-class technologies that can
significantly improve their operations," Bonsignore said.
Overall, he added that the new company is well
positioned for both short- and long-term growth, with more
than 75% of its products leading their respective industries
and most having superior technological positions. Many of
these product offerings lead to significant service revenues
beyond the original sale. The company's broad services and
solutions portfolio includes more than 10,000 patents and
proprietary solutions.
Leadership
The new company's leadership group, which was announced
on June 7 of this year, has been driving the integration
process. Robert D. Johnson, formerly President and CEO of
AlliedSignal's Aerospace business, and Giannantonio Ferrari,
formerly Honeywell's President and Chief Operating Officer,
are the new company's two Chief Operating Officers. Johnson
is responsible for the company's aerospace operations, which
have combined annual revenues of about $10 billion. Ferrari
is responsible for the remaining diversified businesses,
which have combined annual revenues of approximately $14
billion.
Other leadership members include Peter Kreindler,
Senior Vice President and General Counsel; James Porter,
Senior Vice President, Information Systems and Business
Services; Donald Redlinger, Senior Vice President, Human
Resources and Communications; and Richard Wallman, Senior
Vice President and Chief Financial Officer. Ray Stark, Vice
President, Six Sigma and Productivity, will continue to lead
the merger integration process in addition to overseeing the
company's Six Sigma and productivity initiatives.
New Board Of Directors
Honeywell's new 15-member Board of Directors comprises
nine members from the AlliedSignal Inc. Board and six
members from the Honeywell Inc. Board. They are:
Lawrence A. Bossidy, Chairman of the Board, Honeywell
Michael R. Bonsignore, Chief Executive Officer, Honeywell
Hans W. Becherer, Chairman and CEO, Deere and Company
Gordon M. Bethune, Chairman and CEO, Continental Airlines, Inc.
Marshall N. Carter, Chairman and CEO, State Street Corporation
Ann M. Fudge, Executive Vice President, Kraft Foods, Inc.
James J. Howard, Chairman, President and CEO, Northern States Power Company
Bruce Karatz, Chairman, President and CEO, Kaufman and Broad Home Corporation
Robert P. Luciano, retired Chairman and CEO, Schering-Plough Corporation
Russell E. Palmer, Chairman and CEO, Palmer Group
Jaime Chico Pardo, CEO, Telefonos de Mexico, S.A. de C.V (TELMEX)
Ivan G. Seidenberg, Chairman and CEO, Bell Atlantic Corporation
Andrew C. Sigler, retired Chairman and CEO, Champion International
Corporation
John R. Stafford, Chairman, President and CEO, American Home Products
Corporation
Michael W. Wright, Chairman, President and CEO, SUPERVALU INC.
Effect Of The Merger
The all-stock merger is tax free to shareholders,
except for cash paid in lieu of fractional shares. Each
share of the Honeywell Inc. stock is being exchanged for
1.875 shares of the new Honeywell, formerly named
AlliedSignal Inc. Based on 128 million former Honeywell
shares outstanding and the closing price of AlliedSignal's
shares ($60) on November 30, 1999, the transaction is valued
at more than $14 billion. When all of the former Honeywell
shares are exchanged, the new company will have
approximately 793 million shares outstanding with a market
capitalization in excess of $47 billion. The merger is
being accounted for as a pooling of interests.
Honeywell is a US$24-billion diversified technology and
manufacturing leader, serving customers worldwide with
aerospace products and services; control technologies for
buildings, homes and industry; automotive products; power
generation systems; specialty chemicals; fibers; plastics;
and electronic and advanced materials. The company employs
approximately 120,000 people in 95 countries. Honeywell is
traded on the New York Stock Exchange under the symbol HON,
as well as on the London, Chicago and Pacific stock
exchanges. It is one of the 30 stocks that make up the Dow
Jones Industrial Average and is also a component of the
Standard & Poor's 500 Index. Additional information on the
company is available on the Internet at:
http://www.honeywell.com.
This release contains forward-looking statements as defined
in Section 21E of the Securities Exchange Act of 1934,
including statements aboutfuture business operations,
financial performance and market conditions. Such forward-
looking statements involve risks and uncertainties inherent
in business forecasts. For a detailed discussion of the
company's forward-looking statements and the risks and
uncertainties associated with such statements, please see
page 15 of the company's joint proxy statement/prospectus
dated July 23, 1999, filed with the SEC.
# # #