MINNEAPOLIS AlliedSignal and Honeywell continue to hope that regulatory reviews of their proposed merger will be completed in time for them to unite by the end of October. The companies can't say whether they will file third quarter earnings as separate or united entities. They are prepared to do either. Scott Clements, director of investor relations for Honeywell and the designate for that position for the newly merged company, says that both AlliedSignal and Honeywell are on track to report solid third quarter earnings. The third quarter earnings reports, due in mid-October, will be combined if regulatory reviews of the merger are completed early that month, Clements says. The European Commission (EC) and the U.S. Justice Dept. opened in-depth investigations into the proposed $15.3 billion merger to examine the competitive consequences of combining the companies' avionics businesses. "We have had open lines of communications to the regulatory agencies, and we think we have a chance to get this done," Clements says. However, while the companies have had fruitful discussions with the Justice Dept., Clements acknowledges that the EC investigation could continue through mid-January. AlliedSignal and Honeywell executives anticipated some regulatory concern over the combination of the companies' avionics businesses, the only areas in which they overlap. Clements says both companies are committed to doing whatever needs be done to complete the merger, including divesting some operations. "The level (of divestiture) may be in the $100 million range. We could be able to do that without making holes in our strategic portfolio," Clements says. With the new company expected to have sales in excess of $25 billion a year, the divestiture of a $100 million segment would be relatively minor, he says. The new company will be called Honeywell International Inc. and the AlliedSignal name will disappear after the merger. But such brand names as AlliedSignal's Bendix, Fram, and Prestone labels will remain.
