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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - JULY 16, 1999
(June 4, 1999)
ALLIEDSIGNAL INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 1-8974 22-2640650
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction Identification
of incorporation) Number)
101 COLUMBIA ROAD, P.O. BOX 4000, MORRISTOWN, NEW JERSEY 07962-2497
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973) 455-2000
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Item 5. Other Events.
The following supplements the information contained in the
Current Report on Form 8-K (the "Original Form 8-K") filed by AlliedSignal
Inc., a Delaware corporation (the "Company"), with the SEC on June 8, 1999
regarding the Company's proposed merger (the "Merger") with Honeywell Inc.,
a Delaware corporation ("Honeywell"), pursuant to a merger agreement dated
as of June 4, 1999 (the "Merger Agreement").
As noted in the Original Form 8-K, on June 4, 1999, the Company
and Honeywell signed the Merger Agreement pursuant to which Honeywell
agreed to merge with one of the Company's wholly-owned subsidiaries and, as
a result, become a wholly-owned subsidiary of the Company. In the merger,
each outstanding share of common stock of Honeywell will be converted into
a right to receive 1.875 shares of common stock of the Company. At the
effective time of the Merger, the Company will change its name to
"Honeywell International Inc."
In addition, Michael R. Bonsignore, Chairman of the Board and
Chief Executive Officer of Honeywell, is to become Chief Executive Officer
of the combined company at the effective time of the Merger, and Mr.
Bonsignore is to become Chairman of the Board of the combined company on
April 1, 2000, or upon the earlier retirement of Lawrence A. Bossidy, the
Company's current Chairman of the Board and Chief Executive Officer.
The Merger is subject to numerous conditions, including:
- approval of the Merger by the shareowners of the Company and
Honeywell;
- expiration or termination of the relevant waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act;
- receipt of all material regulatory approvals that are
required to complete the Merger, including the approval of
the European Commission;
- the Company's and Honeywell's independent public accountants
confirming that the Merger will qualify for pooling of
interests accounting treatment;
- the Company's and Honeywell's attorneys having issued
opinions that the proposed Merger will qualify as a tax-free
reorganization;
- there being no legal proceeding existing in which a
governmental agency is seeking to require the combined
company to divest assets or to limit its ability to conduct
business to an extent that could be reasonably expected to
have a material adverse effect on the combined company; and
- there being no law or court order in effect that would be
reasonably expected to have a material adverse effect on the
combined company.
Based on the Company's and Honeywell's review of and assumptions
about the operations and infrastructure of the two companies, as indicated
in the Original Form 8-K, the Company and Honeywell expect that the
combined company will realize annual cost savings of approximately $250
million in 2000, $400 million in 2001 and $500 million in 2002. Based on
these estimates and the number of shares estimated to be outstanding
immediately following the Merger, the Company and Honeywell expect these
cost savings to have a benefit of approximately $.17 per share in 2000,
$.26 per share in 2001 and $.32 per share in 2002. The Company and
Honeywell expect to realize the approximately $500 million in cost savings
in 2002 as follows:
- $150 million, by accelerating implementation of the
Company's "Six Sigma" initiative to achieve defect-free
performance in manufacturing and other business processes,
and applying this initiative to Honeywell's business, to
further enhance the quality of the products and services of
the combined company and increase productivity;
- $100 million, by achieving procurement and purchasing
efficiencies by utilizing the Company's and Honeywell's
combined purchasing capabilities, centralizing the two
companies' purchasing processes and benefiting from the
added buying efficiencies that the Company expects as a
result of higher volume purchases;
- $90 million, by rationalizing corporate overhead costs
through the elimination of redundant corporate functions and
facilities;
- $90 million, by reducing overhead in the combined company's
aerospace businesses by eliminating redundancies in the
sales and administrative functions and field service
operations of these businesses;
- $30 million, by integrating the two companies' research and
development programs and achieving research and development
efficiencies;
- $20 million, by reducing the combined company's
infrastructure costs by integrating the Company's and
Honeywell's international operations and eliminating
infrastructure redundancies; and
- $20 million, by providing to Honeywell's business units
administrative services in the areas of accounting, human
resources, travel, information technology and training
through the Company's centralized shared services
organization, and eliminating similar services currently
provided by Honeywell to its business units.
In addition, based on separate company estimates of earnings and
free cash flow generated in the ordinary course of business plus the
expected cost savings expected as a result of the elimination of
redundancies and as indicated above, the Company expects that earnings per
share will grow at 15% annually or more, and that free cash flow will be
over $2 billion in 2002.
While the Company believes that the estimated cost savings,
earnings per share growth and free cash flow will be able to be achieved,
the Company can give no assurance that they will be actually realized.
Specifically, the Company's success in realizing the estimated benefits of
the Merger depends on the quality and speed of the integration of the two
companies. The Company and Honeywell have already established an
integration team that has identified specific areas for cost savings and is
continuing to plan the integration of the two companies. However, the
Company may not realize the estimated benefits from integrating the
operations of the two companies following the completion of the Merger as
fully or as quickly as the Company expects for a number of reasons,
including:
- the large size and worldwide presence and the resulting
complexity of the combined company;
- errors in planning or integration;
- unexpected events such as major changes in the markets in
which the two companies operate; and
- conditions regulatory authorities may impose in connection
with granting approval of the Merger, such as divestiture of
product lines.
The Company and Honeywell estimate that the combined company will
incur significant costs for severance and other integration-related
expenses, including the elimination of duplicate facilities and excess
capacity, operations realignment and related workforce reductions.
In addition, it is possible that the financial position or
results of operations of the combined company could be adversely affected
by two lawsuits previously brought by Litton Systems, Inc. against
Honeywell. Depending on the ultimate resolution of these lawsuits, which
allege that Honeywell is engaging in monopolistic practices in violation of
federal antitrust laws and has infringed a Litton patent, the combined
company may be required to make significant payments.
Earlier this year, a federal District Court entered a $750
million judgment against Honeywell on the antitrust claim. Although
Honeywell's obligation to satisfy this judgment is suspended pending
post-judgment motions and appeals, at this time, the Company is not able to
predict the outcome of these motions and appeals. The potential remains for
adverse judgments against Honeywell which may require the combined company
to make a significant payment and could have a material adverse impact on
the combined company's financial position or results of operations.
In January 1995, a $1.2 billion jury verdict rendered against
Honeywell in the patent infringement suit was set aside by a federal
District Court. On appeal, the Litton patent was found to be valid but not
literally infringed by Honeywell. The matter has been returned to the
District Court before which motions to dispose of the matter are now
pending. If the District Court does not dispose of the matter, Litton may
request a jury trial to address its allegations with respect to the patent
infringement claim and other claims under the state law. If the jury finds
Honeywell liable under any of these claims, it could return another verdict
against Honeywell which could have a material adverse impact on the
combined company's financial position or results of operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
99.2* Analysts Presentations, dated June 7, 1999.
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* Restates the corresponding exhibit in the Company's Form 8-K filed
with the Securities and Exchange Commission on June 8, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: July 16, 1999 AlliedSignal Inc.
By: /s/ Peter M. Kreindler
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Peter M. Kreindler
Senior Vice President,
General Counsel and Secretary
AlliedSignal Inc.
EXHIBIT INDEX
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Exhibit No. Description
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99.2* Analysts Presentations, dated June 7, 1999
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* Restates the corresponding exhibit in the Company's Form 8-K filed
with the Securities and Exchange Commission on June 8, 1999