AlliedSignal-Honeywell Deal Gets Federal OK

AlliedSignal Inc.’s $16-billion acquisition of Honeywell Inc. was cleared by the Justice Department on condition that the companies sell parts of their avionics businesses. Under a proposed consent decree negotiated with the Justice Department, Minneapolis-based Honeywell will sell its Traffic Alert and Collision Avoidance System, situated in Glendale, Ariz. AlliedSignal agreed to divest its search-and-surveillance weather-radar business in Olathe, Kan., and its space and navigation business in Teterboro, N.J.; its Cheshire, Conn.-based communications-electronics business; and its guidance technology business based in Redmond, Wash. The Justice Department said that if it had not insisted on the divestitures there would have been only two or three competitors making each of the products, which include radar used on helicopters to locate small objects such as oil rigs or boats. The companies said they expect to receive approval from the European Commission in time to complete the transaction by year’s end. Shares of AlliedSignal, based in Morris Township, N.J., rose 44 cents to close at $56.06, while Honeywell rose $2 to $105.19, both on the New York Stock Exchange.