Honeywell to Acquire Pittway

On December 20, 1999, Honeywell and Pittway Corporation announced that they have entered into a definitive merger agreement under which Honeywell will acquire Pittway for $45.50 per share in cash. Subject to regulatory approval, the acquisition is expected to close in the first quarter of 2000.

Under the merger agreement, Honeywell is expected to commence, by Thursday, December 23, 1999, a tender offer to acquire all of the approximately 43 million outstanding shares of Pittway's Common and Class A stock.

The value of the transaction will total approximately $2.1 billion. The transaction is expected to be neutral to Honeywell's earnings in 2000.

Pittway is the parent company of CSAA members Ademco, Notifier, System Sensor, ADI, and Northern Computers.

"Pittway will strengthen and be a major growth catalyst for our Home & Building Control business, making the combined entity a premier $5-billion global player in fire protection, security and HVAC controls and systems integration," said Lawrence A. Bossidy, Honeywell's Chairman.

Michael R. Bonsignore, Honeywell's Chief Executive Officer, said, "In one bold and swift move, we are accelerating the transformation of our Home & Building Control business. Pittway adds a dynamic, high-growth engine that will significantly contribute to Honeywell's future revenue and earnings performance. It will dramatically extend our global capabilities in sensors, systems integration and HVAC controls to the rapidly growing $10-billion fire and security industries, which combined are expanding at least 7% to 8% annually."

"By growing in these two industries, we will be able to delight our customers with a broader array of quality products, systems and services as we transform our business to focus on value-added solutions and broader partnerships with our installing and end-user customers," Bonsignore added. "It also will enable us to apply our systems integration expertise to satisfy the increasing demand for offerings that combine fire, security and HVAC controls into one integrated solutions package."

King Harris, Pittway President and CEO, said, "We believe this merger brings together two world-class companies committed to excellence in quality, product performance, manufacturing and customer service. We are impressed with the 'new' Honeywell that Mike Bonsignore is in the process of creating. We are proud of the growth oriented, entrepreneurial culture we have developed over the last 37 years and are convinced that it will accelerate the transformation of the Home & Building Control business within the new Honeywell."

"Together, we will be able to accelerate our efforts to attack the huge potential for advanced technology products focused on integrated control systems for businesses and residences," Harris continued. "Honeywell's extensive, first-rate line of HVAC products and systems will fill a large gap in our product offerings and its expertise in solution selling will be invaluable to all our systems companies. And as we expand our international business, Honeywell's global distribution capabilities will be a tremendous resource for us." q