NEW YORK (CNNfn) -- Honeywell Inc. announced plans Monday to buy Measurex Corp. for $35 cash per share, or $600 million in total.
Minneapolis-based Honeywell, which provides industrial automation and control systems, said the deal would strengthen its position in the paper and pulp industry, as Measurex makes paper-machine integrated control systems.
"Today's announcement signals a major step that will broaden Honeywell's base in the important pulp and paper industry," Honeywell Chairman Michael Bonsignore said.
Said David Bossen, chief of Cupertino, Calif.-based Measurex: "We see this transaction as a way to unite the particular strengths of each of our companies."
On the New York Stock Exchange, Honeywell fell 5/8 to close at 69-3/8, but Measurex rocketed up 10-1/4 to end at 34-1/2.
Some on Wall Street speculated that Honeywell offered too much for Measurex.
But Honeywell financial chief Bill Hjerpe said during an appearance on CNNfn that his company made a fair offer, noting that Measurex stock has traded as high as $35.75 a share. (164K WAV) or (164K AIFF)
Looking ahead, Honeywell and Measurex warned that the deal could produce job cuts, saying in a statement "that a rationalization of redundant functions will occur."
Honeywell spokeswoman Frances Emerson called it "premature to give any numbers (on job cuts), but we don't expect any wholesale measures."
She added that "while it's true that Honeywell is buying Measurex, Honeywell's existing paper and pulp businesses are actually smaller than Measurex's, so it's not yet clear how (cuts) will stack up."
Still, Hjerpe said the companies do not see significant overlapping. (89K WAV) or (89K AIFF)