Honeywell CEO on Failed UTC Merger: ‘If They Don’t Want to Do It, They Don’t Want to Do It’
Merger talks between the two companies were dropped on Tuesday after they began four years ago.
As the dust settles from Honeywell’s dropped merger attempt with United Technologies on Tuesday, Honeywell CEO David Cote is walking away on good terms.
“I can say that at $108 [per share], this is already an incredible deal, or, I should say, was an incredible deal,” Cote said to CNBC’s Jim Cramer on Wednesday. “There was a lot of value there already, but if they don’t want to do it, they don’t want to do it.”
Honeywell announced it had dropped its merger bid shortly after it announced its acquisition of RSI Video Technologies. Cote said Honeywell made UTC “a full and fair offer” that would benefit both sides, but he later lamented that “continuing to try to negotiate with an unwilling partner is inconsistent with our disciplined acquisition process.”
On Wednesday, Cote said he did not turn hostile to try to force a deal with UTC. “I was pretty clear from the beginning with investors that I’m not going to do that,” he said. “We’ve got plenty of other opportunities.
Cote said merger talks with UTC began four years ago when former UTC CEO Louis Chenevert approached Cote about it. Those talks fizzled out. Then in April 2015, UTC reengaged with a proposal, to which Honeywell responded with a counter offer in the end of 2015. Cote said UTC “wanted nothing to do” with their counter offer.
Talks struck up again recently but UTC felt the deal would not “pass muster with antitrust regulators and major customers such as Airbus and Boeing,” the report states. It was also reported that UTC felt $108 per share was too low.
UTC issued the following statement on Tuesday: “This is the appropriate outcome given the strong regulatory obstacles, negative customer reaction and the potential for a protracted review process that would have destroyed shareholder value.”
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