The Associated Press
NEW YORK - John F. Welch Jr. reportedly has agreed to remain chairman of General Electric Co. through 2001 to guarantee the success of GE's $44 billion stock offer to buy Honeywell International Inc.
GE plans to make an announcement regarding its talks with Honeywell late yesterday, a source close to the deal told The Associated Press.
Welch's offer to remain chairman and GE's $44 billion offer were approved Saturday night by Honeywell's board, The Wall Street Journal reported yesterday, citing people familiar with the situation. GE's board of directors was meeting in New York yesterday to review the transaction.
GE, based in Fairfield, Conn., is offering 1.055 of its shares for each Honeywell share, putting a $54.99 per share value on Honeywell's stock based on Friday's close, the Journal reported.
Welch had been scheduled to step down as GE chairman in April, but he proposed staying as part of the company's effort to acquire Honeywell, the Journal reported. Welch also will name a No. 2 and presumed successor within four to six weeks, the Journal reported.
On Friday, industrial conglomerate United Technologies Corp. called off talks on buying Honeywell for a reported $40 billion after Honeywell revealed it was talking to a new suitor.
Honeywell International was created last December, when Minneapolis-based Honeywell was acquired by AlliedSignal, which is based in Morristown, N.J. Honeywell makes equipment for aerospace systems, power generation, transportation and factory automation, as well as specialty chemicals, plastics, fibers and other industrial materials. The company, which set up headquarters in Morristown, has about 120,000 employees worldwide and earned $1.54 billion on revenue of $23.74 billion in 1999.
GE is a diversified company that produces power plant parts and aircraft engines and owns the NBC television network.
A GE spokeswoman declined to comment yesterday afternoon.