Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



A Holiday M&A Party

Maybe it's the Christmas spirit. This week, two hostile parties -- Oracle (Nasdaq: ORCL  ) and PeopleSoft (Nasdaq: PSFT  ) -- came to terms. There also appears to be a peaceful resolution to the hostile takeover bid for the U.K.-based Novar PLC.

Novar had been the target of a hostile bid from Melrose PLC. But yesterday Honeywell (NYSE: HON  ) , the aerospace and defense firm, served as a white knight and agreed to purchase Novar for roughly $1.7 billion (as well as taking on $580 million in debt). The deal is expected to be accretive for Honeywell, which means the company's earnings per share should increase in 2005.

Novar consists of a variety of segments. However, it looks like the main attraction for Honeywell is its security, fire, and building controls products and services. In fact, Honeywell is likely to sell off the other divisions, such as Indalex Aluminum Solutions and Security Printing Services. The deal is highly complimentary and is expected to produce $100 million in annual synergies -- whether in cross-selling or cost-cutting.

No doubt, it appears that M&A is back in vogue, as seen in the aggressiveness of GE's (NYSE: GE  ) recent big deals and expected deals from Sprint (NYSE: FON  ) and Johnson & Johnson (NYSE: JNJ  ) . Wall Street has shown signs of encouragement in response to the deal-making. For example, even though Honeywell announced its lowered outlook for 2005 at $1.90 to $2.00 per share in earnings, the stock was still up $1.14 to $36.45 shortly after the announcement. Wall Street's M&A penalty just might be turning into a plus.

For related articles, click:

If more Foolish discussion is what you're after, check out our Honeywell discussion board.

Fool contributor Tom Taulli does not own shares mentioned in this article.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 504332, ~/Articles/ArticleHandler.aspx, 10/25/2016 4:33:16 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 7 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:00 PM
GE $28.92 Down -0.06 -0.21%
General Electric CAPS Rating: ****
HON $109.26 Up +0.30 +0.28%
Honeywell Internat… CAPS Rating: ****
JNJ $113.61 Up +0.17 +0.15%
Johnson and Johnso… CAPS Rating: ****
ORCL $38.27 Up +0.34 +0.90%
Oracle CAPS Rating: ****