HON Honeywell International Incorporated

RNS Number:2911F
General Electric Company (IRS)
14 June 2001



GE AND HONEYWELL SUBMIT FINAL UNDERTAKINGS TO EUROPEAN
COMMISSION

BRUSSELS, Belgium - June 14, 2001 - GE and Honeywell
submitted to the European competition authorities a final,
detailed package of actions they are willing to undertake as
part of the approval process for their proposed transaction.

The undertakings propose divestitures of $2.2 billion in
revenue in Honeywell's Aerospace business.  The divestitures
include a new business and regional jet engine, air turbine
starters and certain avionics and nonavionics products.  GE
also offered to set up GE Capital Aviation Services (GECAS)
as a separate "ring-fenced" entity to deal at arms length
with Honeywell avionics and non-avionics products.  GECAS
would remain 100% owned and managed by GE.

The proposed divestitures are far short of the European
Commission's demands, which seek billions more than the
proposed GE divestitures.  GE is not optimistic that its
proposal will meet with European regulatory approval.

The submitted undertakings, in the unlikely event they were
accepted, would modestly reduce the positive impacts of the
GE-Honeywell combination.  The divestitures would reduce
Honeywell's $25 billion in revenues by 9% and revenues of
the combined GE-Honeywell by about 1.5%.  The $3 billion of
synergies that had been projected for the acquisition would
remain largely intact and the estimated increase in earnings
per share in the first full year of combined operations
would be reduced from 11 cents to 9 cents.  There would be
no change in the longer-term expectations that the Honeywell
acquisition would increase GE's earning growth rate by one
to two points.

The most recent version of the Commission's Merger Task
Force demands, if they had been accepted by GE and
Honeywell, would have required divestitures of virtually all
of Honeywell's avionics business and its APU business.

Jack Welch, GE's Chairman and CEO, said, "Jeff Immelt and I
wanted to complete the transaction but we have always said
there is a point at which we wouldn't do the deal.  The
Commission's extraordinary demands are far beyond that
point.  This shows you are never too old to get surprised.
In this case, the European regulators demands exceeded
anything I or our European advisors imagined, and differed
sharply from antitrust counterparts in the U.S. and Canada."

While in Europe this week, Mr. Immelt, GE's President and
Chairman-elect, said, "We're thrilled with the performance
of GE's 85,000 employees in Europe and we're very optimistic
about GE's future here."   He added that in spite of the
global economic slowdown, "GE remains confident that 2001,
with or without Honeywell, will be another record year of
double digit operating earnings growth."

GE (NYSE:GE), with 2000 revenues of $130 billion, is a
diversified technology, services and manufacturing company
with a commitment to achieving customer success. GE operates
in more than 100 countries and employs 313,000 people
worldwide. For more information, visit the company's Web
site at http://www.ge.com.


Caution Concerning Forward-Looking Statements

This document includes certain "forward-looking statements"
within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on
management's current expectations and are subject to
uncertainty and changes in circumstances. Actual results may
differ materially from these expectations due to changes in
global economic, business, competitive, market
and regulatory factors. More detailed information about those
factors is contained in GE's filings with the Securities and
Exchange Commission (SEC).


Contact:
Gary Sheffer,  +1 203 373-3476
Louise Binns, +1
203 373-3044

Honeywell (LSE:HON)
Historical Stock Chart
From Jun 2024 to Jul 2024

Honeywell (LSE:HON)
Historical Stock Chart
From Jul 2023 to Jul 2024