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Updated from 1:15 p.m. ET

General Electric

(GE) - Get General Electric Company (GE) Report

on Sunday agreed to acquire

Honeywell International

(HON) - Get Honeywell International Inc. (HON) Report

for about $45 billion in stock.

GE will pay 1.055 of its shares for each Honeywell share, or $55 each. As part of the deal, GE Chairman Jack Welch will stay on past his scheduled April retirement date. Welch will remain in his post until the end of 2001 to help merge the two companies.

"Honeywell's core group of businesses -- avionics, automated controls, performance materials and its new microturbine technology -- are a perfect complement to four of GE's major businesses," Welch said in a statement.

Honeywell's agreement with GE came just a couple of days after talks between it and

United Technologies

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(UTX) - Get United Technologies Corporation Report

broke off. On Friday, United Technologies said Honeywell "advised United Technologies that it is considering an alternative merger proposal received this morning." United Technologies was reported to be offering stock valued at about $40 billion, or just over $50 a share, for Honeywell.

Reports then began circulating that GE was interested in Honeywell. Wall Street traders also speculated that

Tyco International




of Germany were interested in Honeywell.

United Technologies and Honeywell had disclosed they were in merger talks Thursday evening after the news leaked out, driving up Honeywell shares as much as 20% in after-hours trading. That surge continued Friday. Honeywell's shares were up 15% Friday, afternoon, at $41.13, when trading was halted to announce the breakdown of the United Technologies deal. After trading resumed after hours, Honeywell's stock continued to climb in anticipation of a higher bid. The shares ended the day up $10.13, or 28%, at $46.

Meanwhile, shares of United Technologies, which were down as much as 12%, at $59.88, earlier Friday, recouped most of their losses after the proposed takeover fell apart, closing down $3, or 4.4%, at $65.

GE's shares fell $3.50, or 6.3%, to $52.13.

Morristown, N.J.-based Honeywell makes such products as aircraft electronics, specialty chemicals and home security systems.