* 3M in $860 million deal to buy Ceradyne
* Honeywell to pay $525 million for majority of Thomas
* Moves follow talk that sellers' price expectations
* Ceradyne shares surge 43 percent; 3M, Honeywell also gain
By Scott Malone
Oct 1 3M Co and Honeywell International
Inc signed separate takeover deals to expand their broad
lineups of industrial goods at a time of uncertainty for the
U.S. economy, the top U.S. manufacturers said on Monday.
3M said it would pay $860 million to buy industrial ceramics
company Ceradyne Inc. This is the
biggest takeover deal for the maker of products ranging from
Post-It notes to films used in television screens since it named
Inge Thulin chief executive officer in February.
Honeywell announced plans to pay $525 million in cash for a
70 percent stake in privately held Thomas Russell Co, which
makes equipment used in natural gas production. Big U.S.
manufacturers including General Electric Co have invested
heavily to boost their exposure to that sector amid a surge in
U.S. natural gas production driven by advances in hydraulic
fracturing, or fracking, technology.
The announcements come less than two weeks after the CEOs of
both Honeywell and 3M separately said that a worrisome world
economic outlook was making it easier to negotiate acquisitions
by tempering expectations of what companies would fetch.
"If the asset makes sense and the price makes sense, you go
for it," said independent analyst Brian Langenberg.
Ceradyne shares were up 43 percent at $34.94 in early
trading, just below the $35.00 offer price from 3M, whose stock
gained 1 percent to $93.32. Honeywell rose 1.7 percent to
FEWER, BUT LARGER 3M DEALS
Thulin told investors on Sept. 19 that he would seek fewer,
but larger, deals than his predecessor, George Buckley, but he
held to the company's long-term goal of making $1 billion to $2
billion in acquisitions per year.
The company has yet another large deal in the works - it is
working to overcome U.S. regulators' objections to its planned
$550 million takeover of Avery-Dennison Corp's office
Meanwhile, Honeywell's UOP arm has the right to buy the
remaining 30 percent of Thomas Russell, at a price linked to the
business's operating income.
The decade-old Thomas Russell company should generate 2012
revenue of about $425 million, Honeywell said.
Honeywell said it expected its deal to have no effect on
2012 profit and to boost 2013 earnings.
3M said its deal would reduce earnings by 5 cents per share
in the first months following closure.