Honeywell announced Tuesday that it would no longer pursue a so-called strategic combination with United Technologies due to UTC’s unwillingness to engage in negotiations. Honeywell on February 16 approached UTC with an offer for a takeover that UTC flatly rejected. According to a Honeywell presentation to United Technologies chairman Edward Kangas and UTC chief executive Gregory Hayes, the offer would create an immediate $36 billion cash benefit to UTC shareholders and so-called synergies worth $3.5 billion. In response, UTC called the offer “grossly undervalued” and highly unlikely to pass muster with regulatory authorities in the U.S. In fact, Hayes suggested Honeywell’s proposal amounted to a leveraged buyout of UTC using UTC’s own balance sheet. “Putting aside the insurmountable regulatory risks, the proposal is not an attractive deal for UTC’s shareholders and does not reflect UTC’s strong long term outlook,” concluded Hayes.

“Honeywell strongly disagrees with United Technologies’ characterization of the regulatory and customer risks associated with the transaction,” said Honeywell in a statement released Tuesday. “We remain confident that the regulatory process would not have presented a material obstacle to a transaction.”

According to Honeywell, UTC executives said during their February 16 meeting that such a combination “would be fabulous,” that they would take it very seriously and reply with questions within a week of UTC’s upcoming board meeting. Both companies concede they have held talks over the possibility of a merger for several years, and, according to Honeywell, UTC initiated talks in May 2011 and April 2015.

“From both an industrial logic and shareholder value perspective, Honeywell and United Technologies are a great match and that is why the two companies have been talking about a combination for more than 15 years,” said Honeywell chairman and CEO Dave Cote. “We made a full and fair offer that would have greatly benefitted both sets of shareowners.  Considerable value would have been added through the $3.5 billion of very achievable cost synergies...and application of Honeywell management practices, especially our extensive software capability and cost management that would support needed product reinvestment.”