$14billion merger plan joins US control giants
15 Jan 2000
Aerospace-to-resins conglomerate AlliedSignal has agreed to merge with control giant Honeywell to create a new `global technology company'. The merger will cost around 4500 jobs over the first two years, with 2000 jobs lost in the first six months.
The new group, which will be called Honeywell and based in Morristown, New Jersey, will have annual revenues approaching $25billion. The driving force behind the merger is the combination of the firms' aerospace divisions, with Honeywell's avionics business dovetailing with AlliedSignal's flight safety systems operations. Other divisions will include speciality chemicals, performance fibres, plastic and advanced materials (all from AlliedSignal) and control systems for industry, space, buildings and homes (from Honeywell).
The new board will be comprised of nine members from AlliedSignal and six from Honeywell. Initially, it will be chaired by AlliedSignal ceo Larry Bossidy; however Bossidy is due to retire in six months, and will be succeeded by Honeywell ceo Mike Bonsignore.
The companies believe that they can cut costs by $500millon per year through the merger, mostly through rationalising overheads and streamlining procurement.
