Acquisition of Honeywell

In: Business and Management

Submitted By ishyta
Words 776
Pages 4
Acquisition of Honeywell
Ishyta Hick
Financial Decisions MGT 769
April 9, 2013

Honeywell Acquisition
Jessica Gallinelli, managing director of Bancroft capital management is facing financial decision either to hold or sell her shares in Honeywell before Honeywell merge with GE. Gallinelli own 10 million shares in Honeywell and its short position of 10 million shares in GE. The key factors on Gallinelli either to sell or hold shares were based on the value of shares after the merger, also she wanted to know how the market will respond to Honeywell shares after decisions from both the antitrust regulatory of the European Commission (EC) and The U.S. department of justice.
Gallinelli also planned to consider relevant personality and political issues. Both Mario Monti of European Commission and Charles James U.S assistant attorney general, Had personal interests in the outcome of the case. Because their job performances on political career depends on approve from the society how they perceive them as regulators. Allowing the merger will add the value to both Honeywell and GE shares and rejecting the merger will lead to loss for both companies’ shares.
Valuation of Honeywell
Common shares during merger (Year 2000) 801.4 million
Price per share $ 36.72
Honeywell value = 801.4*36.72 = $ 29,427.41 billion

Antitrust Concerns
The market was careful waiting regulators responses toward the deal. In U.S the regulators consist of department of justice and U.S trade commission. If these two departments approve a merger other party let say another company can still sue to block the merger. In Europe, European Commission has final say on the merger. It is my suggestion that trading of shares was slow during antitrust review and the share prices rose after the deal was approved by both European and U.S. regulators.

Hershey Trust Company
Milton Snavely Hershey…...

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