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GE/Honeywell declared dead
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October 2, 2001: 12:49 p.m. ET
Companies formally terminate merger, set smaller deals
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NEW YORK (CNNfn) - GE and Honeywell on Tuesday formally terminated their merger deal, which was squelched by European regulators who said such a combination would have severely reduced competition in the aerospace industry.
In connection with the termination, GE agreed to reimburse Honeywell for merger-related expenses and agreed to extend two financing arrangements on mutually acceptable terms.
GE (GE: up $0.15 to $37.79, Research, Estimates) also said it has "agreed in principle" to acquire from Honeywell (HON: down $0.10 to $26.00, Research, Estimates) its Tensor business, which makes oil and gas sensors, Honeywell Advanced Composites and certain technology related to micro turbines and fuel cells.
Financial terms of the purchase of those businesses, which the companies said have 2001 aggregate sales of $35 million, were not disclosed.
GE had agreed to purchase Honeywell last fall, trumping another bid made by United Technologies.
The proposed deal won regulatory approval in the U.S., but the European Commission struck it down in July, even after GE, the world's largest conglomerate, offered to sell assets worth about $2.2 billion in annual revenue in a bid to save the deal and win approval.
The European regulators were concerned that combining GE and Honeywell would create a company with too much power in aerospace products and engines that would prove to be anticompetitive. 
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