Honeywell Closes Transactions With BASF; Combined Nylon Operations to Create Greater Synergies, Expanded Strategic Options for Honeywell Specialty Materials

    MORRIS TOWNSHIP, N.J.--May 1, 2003--Honeywell today announced it has completed two transactions with BASF , previously announced on January 14, 2003, in which Honeywell sold its engineering plastics business to BASF in exchange for BASF's nylon fiber business and $90 million in cash. All regulatory approvals necessary for the completion of the transaction have been obtained from the relevant authorities, including the U.S. Federal Trade Commission.
    For Honeywell, the transactions are the latest steps in the restructuring of its Specialty Materials business unit. The new combined business entity, to be known as Honeywell Nylon, is expected to yield annual sales of approximately $1 billion.
    "We will immediately begin the process of integrating the capabilities of BASF fibers and the legacy Honeywell nylon system into a flexible, high performance nylon company," said Nance Dicciani, President and CEO of Honeywell Specialty Materials. "This combination will result in greater economies of scale and increased cost synergies providing a stronger, more valuable business with additional strategic opportunities and a broader market reach. The nylon transaction represents a unique opportunity to create a fully integrated business with the scale, flexibility and synergies to make it a more valuable asset with the capability to serve the needs of both fiber and plastics customers."
    Honeywell Nylon will offer a robust pipeline of products, including Honeywell's Anso(R) and BASF's Zeftron(R) carpet fiber brands as well as strong customer channel access. The new unit will provide nylon fiber to the carpet fiber industry in commercial, automotive and residential end uses; textile nylon fiber, including a diversified line of nylon yarns for apparel fabrics; nylon for automotive headliner fabrics; and solution dyed nylon for upholstery fabrics. Additionally, Honeywell Nylon will supply engineering resins and chemicals to numerous customers
    The new business unit will include fiber, chemicals and polymerization manufacturing plants in South Carolina, Virginia, Canada and China and research facilities and sales offices in North America. Honeywell Nylon will employ approximately 4,100 personnel.

    Honeywell International is a diversified technology and manufacturing leader, serving customers with aerospace products and services; control technologies; automotive products; specialty chemicals; fibers; and electronic materials. Based in Morris Township, N.J., Honeywell's shares are traded on the New York Stock Exchange under the symbol HON, as well as on the London, Chicago and Pacific Stock Exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average and is also a component of the Standard & Poor's 500 Index. Additional information on the company is available at www.honeywell.com. Honeywell's specialty materials business, also headquartered in Morris Township, N.J., is a world leader in the production of nylon, polyester, polyethylene, fluorocarbons, caprolactam, electronic materials and specialty chemicals.

    This release contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, including statements about future business operations, financial performance and market conditions. Such forward-looking statements involve risks and uncertainties inherent in business forecasts as further described in our filings under the Securities Exchange Act.