Karen Walker
"Less of a merger and more of a marriage," is how AlliedSignal Aerospace president Bob Johnson views the proposed deal with Honeywell.
And, in his opinion the sooner the wedding ceremony, the better.
Speaking in Paris on the eve of the required "quiet time", during which company executives will be limited legally in what they can say while the required due diligence process is completed, Johnson took the opportunity to brief journalists on his thoughts about the merger.
"It is important that this is not regarded as an acquisition, but as a marriage," says Johnson. "It is a merger in the true sense to satisfy the growth prospects of both companies."
Successful
Johnson believes there are four key tasks to ensuring a successful merger.
"First, I think you should make it possible for two great technology companies to be able to get together so that one and one makes three, or even ten," says Johnson.
"Second, it is also important to listen to our customers to find out what it is we can do to solve their problems. But if we have not solved our own problems, then we will not be able to solve anything.
"We should be thinking about the future. What are the problems of the world that we cannot do anything about short term, but that we can address long term?
"And finally, we need to do this merger quickly. The companies that make the change quickly are the ones that make it work. Those that drag out the process don't make it work. So... speed, technology and customers are the future."
Johnson believes it should take three months to plan the merger and three months to put that plan into action, meaning that the new, fully-integrated company could be in place as soon as by the end of this year.
He anticipates no problem of morale associated with such a swift change, saying that both sides are excited and anxious to talk to each other and get going.
Quality
"This is not about one company doing something to the other," he points out. "It is about quality teams exploring avenues and it is much more about synergies and growth opportunities."
Johnson says he has been asked several times why this particular merger, which has been rumoured for some months, has happened now.
"People in both companies have contemplated this merger for some time," acknowledges Johnson.
"I think it is happening now for a number of reasons. The value of the two companies are well matched; consolidation is going on in the industry and the timing of the successor planning is good."
Transition
AlliedSignal chairman Lawrence Bossidy had already announced his intention to retire next year, which will allow him to oversee the transition before handing over to the new company's chairman designate, Honeywell's current chairman Mike Bonsignore.
And it was Bossidy, Johnson confirms, who made the first approach that resulted in the two companies finally getting together. "Larry made the call," says Johnson.
How easy was it to agree to go with Honeywell for the new company's name? Not a problem, says Johnson.
The Honeywell name, it was quickly agreed, was the stronger brand in the marketplace and AlliedSignal employees are not overly concerned about losing their company name. Many employees, he points out, assumed the AlliedSignal name only after their previous companies were acquired in an AlliedSignal buying spree. They are used to corporate identity changes.
Reaction to the merger has been "very positive" on all fronts, says Johnson.
Brilliant
The stock market likes the idea because it is a "...natural fit with little or no product overlap" while customers have been calling both companies with congratulations remarks like "brilliant" and "about time", says Johnson.
He adds that employees on both sides initially were really only concerned about one issue - their benefits' packages. "I think it is a rather telling point that both companies have excellent benefits' schemes, so this was the only issue that really bothered people."
Johnson also points out that more recent changes at AlliedSignal, with a major restructuring announced barely a month before the merger news, was done in a way that would allow other companies to be easily "plugged in" if acquisitions were made.
Watch this space as the consolidation game continues.
Source: Flight Daily News
