Honeywell announced Tuesday that it would no longer pursue a so-called strategic combination with United Technologies due to UTC’s unwillingness to engage in negotiations. Honeywell on February 16 approached UTC with an offer for a takeover that UTC flatly rejected. According to a Honeywell presentation to United Technologies chairman Edward Kangas and UTC chief executive Gregory Hayes, the offer would create an immediate $36 billion cash benefit to UTC shareholders and so-called synergies worth $3.5 billion. In response, UTC called the offer “grossly undervalued” and highly unlikely to pass muster with regulatory authorities in the U.S. In fact, Hayes suggested Honeywell’s proposal amounted to a leveraged buyout of UTC using UTC’s own balance sheet. “Putting aside the insurmountable regulatory risks, the proposal is not an attractive deal for UTC’s shareholders and does not reflect UTC’s strong long term outlook,” concluded Hayes.
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