Antitrust hurdles and customer resistance would make a merger with Honeywell International Inc. too difficult to get done, said United Technologies Corp.’s chief executive officer.
“It ain’t gonna happen,” Gregory Hayes said Tuesday on CNBC.
The aerospace and building-products companies have held exploratory talks about a potential tie-up, United Technologies said Monday. A deal would be among the largest-ever aerospace mergers, creating a behemoth with products spanning jet engines, thermostats and elevators. Its combined annual revenue would be more than $90 billion.
Connecticut-based United Technologies, which acquired Charlotte-based Goodrich in 2012, has said it employs about 300 at its UTC Aerospace Systems headquarters in Charlotte, and about 200 in Monroe.
Initial discussions began in April and continued over the year, Hayes said. Honeywell last week offered $108 a share for United Technologies, or about 22 percent more than the stock price at the time, a person familiar with the matter said.
United Technologies and Honeywell have “tremendous” overlap between their businesses, and getting regulatory approval to merge would be “very hard,” Hayes said. Customers also would oppose a potential deal that would give the combined company considerable pricing power, he said.
“While no one would argue about the merits of putting these great businesses together, what became very apparent to us is it just cannot happen,” Hayes said. “There’s just no path forward that we could see.”
United Technologies shares rose 4.7 percent Monday after news of Honeywell’s overture was reported, marking the biggest gain in more than four years and boosting its market capitalization to $77 billion. Honeywell fell 2 percent, giving it a valuation of about $81 billion. The Observer contributed.