Honeywell and BASF Complete Fiber & Engineering Plastics Transaction

MORRIS TOWNSHIP, N.J., May 1, 2003 -- Honeywell (NYSE: HON) today announced it has completed two transactions with BASF (NYSE: BF), 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® and BASF’s Zeftron® 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.