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GE TO MERGE WITH, TAKE REINS OF HONEYWELL

NEW YORK




The General Electric Co. (GE) and Honeywell announced that GE has agreed to acquire Honeywell in a tax-free merger valued at $45 billion dollars, plus assumed debt. As part of this definitive agreement, Honeywell shareowners will receive 1.055 shares of GE stock in exchange for one share of Honeywell. Along with other customary deal protections, GE will receive an option for 19.9 percent of Honeywell’s outstanding stock.

The announcements were made by John F. Welch, chairman and CEO of GE, and Michael R. Bonsignore, chairman and CEO of Honeywell. Bonsignore will become a member of the GE board of directors, as will two additional Honeywell directors.

“This transaction preserves and strengthens the Honeywell brand worldwide, while providing superior value to our shareowners, customers and employees,” says Bonsignore. “Honeywell’s rich global heritage of technology and innovation will be substantially enhanced as part of GE.” Welch adds, “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. Not only are the businesses a perfect fit, but so are the people and processes.”

GE expects to account for the Honeywell acquisition as a pooling of interests, and will use the “GE-Honeywell” brand name in some key product lines. The merger agreement, which is expected to be completed in early 2001, is subject to regulatory approval and the approval of Honeywell shareowners.

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