But Honeywell Disagrees With UTC's Analysis

United Technologies Corp. has confirmed that it has previously engaged in preliminary, exploratory conversations about a range of potential collaborative options with Honeywell. However, UTC never explored these options further due to significant regulatory obstacles, customer concerns and valuation issues, the company said in a media release posted on its website.

In particular, United Technologies has communicated to Honeywell that combining two of the world's largest players in the aerospace and commercial building segments would face insurmountable regulatory obstacles and strong customer opposition, and could either be blocked outright or conditioned on significant divestitures after a lengthy and disruptive review period that would destroy shareholder value.

United Technologies Board of Directors and management team continue to believe that UTC's world-class, global franchises have generated and will continue to generate significant cash flow through economic cycles, and its business segments are extremely well positioned to create long-term shareholder value.

Honeywell also acknowledged the discussions in a similar release, but differed with UTC on the potential regulatory and other hurdles.

Honeywell said it believes the combined company's financial profile would be stronger than the highest valued peers in the multi-industry group today, creating an opportunity for incremental value for both sets of shareowners over the short- and long-term. A combined Honeywell and United Technologies would maintain a strong investment grade rating, and have higher free cash flow and a rapid deleveraging profile.

We would not and will not pursue a transaction that is not in the best interest of our shareowners, consistent with our successful and disciplined capital deployment framework. Regardless of whether a transaction occurs, we are highly confident in our long-term growth prospects, our ability to create shareowner value, and our strong investment grade balance sheet.

"Honeywell has built a company that is well positioned for continued global growth as a standalone company over the long-term," said Honeywell Chairman and CEO, Dave Cote. "We have built a track record of strong performance that has seen us regularly meet or exceed expectations. The Company has delivered double-digit earnings growth for six consecutive years and has shown that our differentiated technologies and the diversity of opportunity in our portfolio is working, and that our process initiatives, including HOS Gold, are driving new business efficiencies and profitability. This performance, combined with a balanced capital deployment framework that included $10 billion in 2015 on a combination of acquisitions, reinvestments in our business, and increased dividends, has helped Honeywell increase shareowner value nearly 500% since 2003, outpacing both the S&P 500 and our peer averages. We are committed to continuing this outperformance."

FMI: www.honeywell.com, www.utc.com