Honeywell will leave Minneapolis, its home since Al Butz invented the coal furnace heat regulator in 1885, and relocate to Allied's headquarters in Morristown, N.J. The combined company will be called Honeywell.
The merger combines two global players to create a Fortune 50 company that brings together deep management talent and diverse, successful and complementary businesses with a combined market capitalization in excess of $45 billion.
Under the terms of the agreement, each share of Honeywell common stock will be exchanged for 1.875 shares of AlliedSignal common stock. Based on 126 million Honeywell shares outstanding and AlliedSignal's current stock price, the transaction is valued at more than $14 billion. The new company will also assume $1.5 billion of Honeywell debt. The transaction is expected to be tax-free to shareholders and will be accounted for as a pooling of interests. It is expected to close in the fourth quarter of 1999.
Lawrence A. Bossidy, 64, chairman and CEO of AlliedSignal, will be the new company's chairman and, until his retirement on April 1, 2000, will focus on integrating the two companies.
Michael R. Bonsignore, 58, chairman and CEO of Honeywell, will be the new company's chief executive officer.
The board of directors of the new company will be comprised of nine members from the current AlliedSignal board and six members from the current Honeywell board.
Upon Bossidy's retirement, Bonsignore will become chairman.