BW20030114002138  20030114T130515Z UTC


( BW)(HONEYWELL-INTL)(HON) Acquisition 

    Business Editors
    UK REGULATORY NEWS

    MORRIS TOWNSHIP, N.J.--(BUSINESS WIRE)--Jan. 14, 2003--

   Honeywell Sells Engineering Plastics Unit To BASF For $90 Million
                  Cash Plus BASF Nylon Fiber Business

    Combined Nylon Operations Create Greater Synergies and Expanded
                     Strategic Options for Future

Honeywell (NYSE: HON) today announced definitive agreements with
BASF (NYSE: BF) for two transactions that are part of a planned
restructuring of Honeywell's Specialty Materials business unit.

Under terms of the agreements, Honeywell will sell its engineering
plastics business to BASF and will acquire BASF's nylon fiber
business. Honeywell will receive $170 million in cash and all of
BASF's nylon fiber business at closing. Honeywell will pay $80 million
to BASF within one year of the transaction's close.

Significant synergies will result from the integration of BASF's
nylon fiber business with Honeywell's existing nylon business.
Honeywell expects increased utilization of its Hopewell, Va.,
caprolactam manufacturing facility that will supply nylon feedstock to
the combined business as well as its fiber and plastics customers. The
company added that it will retain its nylon films business and all of
its specialty chemicals operations.

The transactions are expected to close in the first half of 2003,
subject to regulatory approval in several jurisdictions.

For Honeywell, the result of the transaction is cash and a
stronger nylon business that will be greater than the sum of its
individual parts.

The combination of Honeywell's and BASF's nylon fiber businesses
will result in greater economies of scale and increased cost synergies
providing a stronger, more valuable business with more strategic
opportunities and flexibility in the future," said Nance Dicciani,
President and CEO of Honeywell Specialty Materials. "This transaction
is a significant step in our plans to rationalize the business by
improving its current financial performance and long-term growth
prospects. The plastics transaction will allow us to exit a non-core
compounding business. The nylon transaction represents a unique
opportunity to create a fully integrated business with the scale and
synergies to make it a more valuable asset with the flexibility to
serve the needs of both fiber and plastics customers."

In 2001, Honeywell's engineering plastics business had sales of
about $350 million, while BASF's nylon fibers group sales were
approximately $350 million for the same year. Sales for Honeywell's
retained nylon business in 2001 totaled nearly $700 million.

Nylon Agreement

The nylon transaction offers significant economies of scale and
cost-reduction opportunities for Honeywell: a robust pipeline of
products, including its Anso(R) carpet fiber brand; and strong
customer channel access.

It will include fiber and polymerization manufacturing plants,
research facilities and sales offices in North America from both
companies, with manufacturing plants in South Carolina, Virginia,
Canada and China. The businesses currently employ approximately 1,600
BASF personnel and 2,500 Honeywell personnel. It also includes a nylon
carpet fiber business that serves the commercial, automotive and
residential markets; textile products, including a diversified line of
nylon yarns for apparel fabrics; nylon, for automotive headliner
fabrics; and solution dyed Zeftron(R) 200 nylon, for upholstery
fabrics.

BASF's fiber intermediates plants in Freeport, Texas, and Enka,
N.C., as well as its related facilities outside North America (except
the Hua Yuan nylon carpet fibers plant in Shanghai, China), are not
included in the sale.

Engineering Plastics Agreement

Honeywell's global engineering plastics portfolio includes nylon,
polyester and alloys offered in the Capron(R) (nylon 6 and nylon 6,6),
Petra(R) (post-consumer recycled polyester) and Nypel(R)
(post-industrial nylon 6) product lines.

The agreement covers polymerization and compounding facilities,
research and development assets and sales and technical service
locations in North America, Europe and Asia. The Honeywell business
currently employs about 500 people.

The transactions portend a brighter future for Honeywell's
Specialty Materials group, according to Dr. Dicciani. "These changes
highlight our commitment to focus on higher-margin growth
opportunities that can contribute to the overall profitability of
Honeywell," she said. "We're confident that, with the transaction, we
are on the right track."

Honeywell International is a diversified technology and
manufacturing leader, serving customers with aerospace products and
services; control technologies; automotive products; specialty
chemicals; fibers; and electronic materials. Based in Morris Township,
N.J., Honeywell's shares are traded on the New York Stock Exchange
under the symbol HON, as well as on the London, Chicago and Pacific
Stock Exchanges. It is one of the 30 stocks that make up the Dow Jones
Industrial Average and is also a component of the Standard & Poor's
500 Index. Additional information on the company is available at
www.honeywell.com . Honeywell's specialty materials business, also
headquartered in Morris Township, N.J., is a world leader in the
production of nylon, polyester, polyethylene, fluorocarbons,
caprolactam, electronic materials and specialty chemicals.

This release contains forward-looking statements as defined in
Section 21E of the Securities Exchange Act of 1934, including
statements about future business operations, financial performance and
market conditions. Such forward-looking statements involve risks and
uncertainties inherent in business forecasts as further described in
our filings under the Securities Exchange Act.

   Short Name: Honeywell Intl
   Category Code: ACQ
   Sequence Number: 00001587
   Time of Receipt (offset from UTC): 20030113T221248+0000

    --30--EB/ny 

    CONTACT: Honeywell                                                      
             Rich Silverman (U.S.)                                         
             973-455-4732                                                  
             richard.silverman@honeywell.com                               
             OR
             Elma Peters (Europe)                                          
             +32 2 728 2588                                       
             elma.peters@honeywell.com                            
             OR
             BASF
             Tim Fitzpatrick (U.S.)
             973-426-2305
             fitzpat@basf-corp.com
             OR
             Jennifer Moore-Braun (Europe)
             +49 621 60 20829
             jennifer.moore-braun@basf-ag.de

    KEYWORD: NEW JERSEY UNITED KINGDOM INTERNATIONAL EUROPE
    INDUSTRY KEYWORD: MANUFACTURING CHEMICALS/PLASTICS MERGERS/ACQ 
    SOURCE: Honeywell Intl

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