General Electric Co is to buy aircraft electronics giant Honeywell International Inc for about $44 billion in stock, or $55.12 a share, it has emerged.

As part of the deal Mr John F. Welch Jr will stay on as chairman of GE until the end of next year, according to sources.

Mr Welch, who turns 65 on November 19th, was due to retire next April. GE is expected to name a number two and heir apparent within the next month or two.

Honeywell and GE declined to comment last night.

Honeywell is a leading maker of avionics, or aircraft electronics, as well as turbochargers, speciality chemicals and automated control systems.

GE, a leading manufacturer of aircraft engines, would gain more strength in the sector with an acquisition of Honeywell. But GE may have to make some divestitures to win the approval of antitrust regulators. Among its many interests, GE also owns financial services powerhouse GE Capital and the NBC television network.

Under the deal, GE will pay 1.055 of its shares for each of Honeywell's 801.05 million shares outstanding.

Based on GE's closing price on Friday of $52 1/4, that bid values Honeywell at $55.12 a share.

Shares of Honeywell rose $10 5/16, or nearly 29 per cent, to close at $46 in regular trading on the New York Stock Exchange on Friday.

GE stock, in contrast, fell $3 3/8 or more than 6 per cent, to close at $52 1/4 in regular trading on Friday.

GE made its 11th-hour bid for Honeywell on Friday, just one day after Honeywell confirmed it was in merger talks with United Technologies Corp.

United Technologies had offered about $40 billion in stock, or about $50 a share before breaking off the talks on Friday after GE expressed its interest in Honeywell.