Aerospace giants Honeywell and United Technologies (UTX) recently held talks about a merger with the potential to create a $94 billion sales colossus, but United Technologies pulled out of the talks due to antitrust worries.
The discussions occurred within the past two weeks and were focused on a deal in which Honeywell offered a premium, largely in stock with some cash, for the smaller United Technologies. The Wall Street Journal reported late on Monday that the bid was worth $108 per UTX share, with $42 of the offer in cash, and that UXT holders would have owned 40 percent of the combined company.
Shares in United Technologies jumped when news of the possible deal broke on Monday, and Honeywell's stock wavered.
In a statement issued after reports of the talks emerged and after U.S. markets closed, United Technologies confirmed that it had been in "preliminary, exploratory conversations about a range of potential collaborative options with Honeywell," but said it did not explore the options further due to "significant regulatory obstacles, customer concerns and valuation issues."
There were significant concerns on the UTX side over whether any combination could pass an antitrust review, given the two companies provide so much of what goes into an airplane and would likely face opposition from the likes of Boeing and Airbus.