Honeywell's first-quarter profit dropped 18 percent as sales declined while the US economy slowed. The biggest maker of automated controls had reduced its profit forecast three times in the past year. The company's shares have dropped 30 percent this month as concern increased about approval of the transaction.
United Technologies Corp, which was outbid by Welch in October for Honeywell, could may another offer for the company, analysts said. A less attractive offer would likely be made this time around, they said. United Technologies has declined to comment on the speculation of another takeover attempt.
Honeywell would provide other benefits to General Electric.
The company is the biggest maker of active factory controls, a business that could be combined with General Electric's passive controls operations to develop software to sell packages of system controls for buildings from factory equipment to home systems.
In power-systems, Honeywell is one of two makers of so-called microturbines, which General Electric doesn't make.
The addition would have rounded out that unit's product line as demand for backup sources of electricity rises. General Electric is already the biggest maker of turbines for power plants.
"If the General Electric deal is scuttled, Honeywell's management will have to get back in control of the company," said Tom Burnett, president of Merger Insight, an institutional research firm.
"Honeywell has been operating as the tail on the GE dog."
RSS