Honeywell Acquisition of Intermec Slowed by Antitrust Issues

Published on August 6, 2013

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By: Natalie Sheerer, Marketing Specialist

In December 2012 Honeywell, the third largest provider of mobile computers, announced that it was acquiring Intermec, the second largest mobile computer provider, for $600 million. Now, over seven months later, the deal still hasn’t closed, and it may not close for another three months. The Federal Trade Commission (FTC) has requested additional information regarding the acquisition, pushing the deal back.

The competition for rugged handheld devices used in industrial, retail, and healthcare settings is believed to be the focus of the FTC’s current investigation. Honeywell (12% market share) and Intermec (11% market share) make up two of the top three competitors in the rugged handheld market, with Motorola Solutions Inc. as the industry leader, currently holding 43% market share.

In support of the deal, Honeywell won EU regulatory approval for the proposed acquisition in June of this year. The European Commission, which acts as a competition regulator across the EU, announced that the deal would not raise competition concerns. The Commission focused its assessment of the deal on the rugged handheld market, finding that Honeywell will continue to face competition from a number of other manufacturers in this market.

It is possible that the FTC is more concerned about Honeywell gaining control of Intermec’s wealth of patents, which could prove to be invaluable to Honeywell in the long run. In the past, Intermec has licensed these patents to other RFID manufacturers through its Rapid Start Licensing Program. Patent licensees include Motorola Solutions, formerly Symbol Technologies, as well as Zebra Technologies, Avery Dennison, and Texas Instruments. The concern about patents could be addressed by requiring Honeywell to maintain Intermec's licensing agreements.

If the $600 million deal goes through, it will be a game changer for the rugged handheld market. The competition will go from three big players, down to two. It will be interesting to see the impact on the market and if any other major players surface.