MORRIS TOWNSHIP, N.J. - Honeywell announced that it has reached an agreement to acquire British company Novar plc for 1.2 billion pounds (US $2.4 billion).

Honeywell expects to fund the acquisition with existing cash resources and credit facilities. The acquisition is expected to have an accretive impact on Honeywell's 2005 earnings per share.

Novar's core divisions include Intelligent Building Systems (IBS), Indalex Aluminum Solutions, and Security Printing Services. Novar's IBS unit is expected to enhance Honeywell's offering of security, fire, and building controls products and services, particularly in the United Kingdom and Germany, and support its strategy of global growth of these businesses. Honeywell said it does not intend to hold Indalex Aluminum Solutions and Security Printing Services in the long-term and expects to pursue strategic alternatives for these units as soon as practical.

"This acquisition is an excellent opportunity to further expand our Automation and Control Solutions business," said David M. Cote, Honeywell chairman and CEO. "Honeywell has a long heritage in providing premier integrated security, fire, and building controls products and services. We see great opportunities in this business, and the integration of Novar's highly complementary products, services, and expertise clearly enhance those prospects. Novar has a great heritage built on a competitive product offering, a talented workforce, and a management team dedicated to delivering value to their customers. Adding these assets to Honeywell's already strong global technology platforms will deliver benefits for customers and expanded opportunities for employees of both companies. We look forward to working with Novar's management team to realize the benefits of this combination."

Honeywell intends to integrate Novar's IBS unit into its Automation and Control Solutions (ACS) division. Honeywell ACS is an approximately $8 billion business with more than 40,000 employees worldwide.

Publication date: 12/20/2004