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AlliedSignal in $1B deals
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July 9, 1999: 6:11 a.m. ET
Electronics giant buys one unit for $625M, sells one for $425M
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LONDON (CNNfn) - AlliedSignal spent $625 million Friday by purchasing Johnson Matthey Electronics, but immediately recouped $425 million by selling its laminates business.
Johnson Matthey Electronics, a division of the U.K. metals group Johnson Matthey (JMAT) supplies materials to the semiconductor manufacturing industry. In generated revenue of 671 million in the year ending last March.
Laminate Systems is being sold to German plastics and chemicals group Rütger.
AlliedSignal (ALD) Chairman and Chief Executive Officer Lawrence Bossidy said in a statement the moves would add to earnings in the year 2000, and were part of an ongoing attempt to reposition its electronic materials activities. Under the plans nonstrategic businesses are being divested, and the group is aiming to increase its presence in higher-margin activities.
Johnson Matthey has been evaluating options for the business since last year, when it decided manufacturing semiconductor materials was not a core activity.
Some of the proceeds from the deal will go toward repaying group debts and the rest will go to either acquisitions or back to shareholders, according to a statement from Johnson Matthey.
AlliedSignal officials in Europe were not available for comment.
Johnson Matthey stock rose 2 percent to 638 pence in London Friday. AlliedSignal closed at 65-1/8, up 1-1/4 in New York Thursday.
AlliedSignal is in the process of merging with Honeywell (HON) in a $13.8 billion deal.
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