With Honeywell's (HON) annual investor conference slated for Wednesday, it has simply run out of time to carry on its standoff with United Technologies (UTX).
The Morristown, N.J.-based manufacturer said in a statement Tuesday that UTX's "unwillingness to engage in negotiations" was the primary impetus behind the merger proposal's deterioration.
"Honeywell was interested in a combination because we saw compelling value creation for both sets of shareholders and a readily executable transaction due to two largely complementary business portfolios," the company said. "Honeywell strongly disagrees with United Technologies' characterization of the regulatory and customer risks associated with the transaction."
As Real Money reported, the deal was all but dead after UTX's Friday filing with the SEC. The filing debunked Honeywell's assertion that a tie-up between the two corporations would create $3.5 billion in cost savings, and said that the proposal would likely never overcome antitrust road blocks. This has reminded some investors of the proposed combination between fellow jet-engine manufacture General Electric (GE) and Honeywell, which was swatted down by European regulators on anticompetitive grounds.
"From both an industrial logic and shareholder value perspective, Honeywell and United Technologies are a great match and that is why the two companies have been talking about a combination for more than 15 years," Honeywell CEO Dave Cote said Tuesday. "We made a full and fair offer that would have greatly benefitted both sets of shareowners."
Meanwhile Real Money's Jim Cramer said the proposed itself has may have opened new doors in the industrial market for M&A players, potentially bringing new discounts to light.
"The industrials, those big, fat, ugly ducklings that have gone unloved for ages, suddenly are looking mighty good," he said in a report last week. "The acquisition highlighted something that's been lost entirely in this bifurcated market, where Kimberly-Clark (KMB), Procter & Gamble (PG) and Clorox (CLX) trade at immense levels to their earnings, while many of the industrials wallow around in purgatory because of fears over China."