3/2/2008 6:49:58 PM United Technologies Corp. (UTX) said Sunday that it has made an offer to the board of Diebold Inc. (DBD) to buy all the outstanding shares of Diebold for about $3.0 billion or $40.00 per share in cash.

UTC's proposal represents a premium of about 66% to Diebold's closing stock price on Feb. 29, 2008. The proposal is not subject to any financing contingency.

George David, Chairman and CEO of United Technologies said, “This transaction creates significant and immediate value for Diebold shareholders with no operational risk, while creating long term value for UTC shareholders. Diebold represents an excellent fit with UTC, with its strong market position, U.S. footprint, and balance between product and service revenues.”

North Canton, Ohio-based Diebold is a manufacturer of ATMs and voting machines. Last month, the company said it would cut about 800 jobs or 5% of its global work force, due to the deteriorating condition of the credit markets within the U.S. bank industry that is expected to curtail demand for ATMs.

The job cuts, which are contemplated to occur in North America, Brazil and select areas of Western Europe, were in addition to the company's ongoing $100 million cost-reduction program. The company said the job cuts began in the fourth quarter of 2007, with more than 100 positions having already been eliminated, and will continue through the rest of 2008.

Diebold estimates that the impact of the change in its revenue recognition method will result in a net revenue increase for the full years 2007 and 2006 of about $31 million and $27 million, respectively. The cumulative net revenue impact from the change in revenue recognition method will result in a decrease of $190 million to previously reported revenue in years prior to 2006.

Accordingly, Diebold estimated its full year 2007 revenue to be about $2.953 billion, up about 1% from the revised full year 2006 revenue of $2.933 billion. The company also expected 2008 revenue to grow 6% to 8% over full year 2007. Additionally, Diebold said it expects an ongoing review of accounting items to be over by the end of the first quarter or during the second quarter of 2008.

In a letter to Diebold's Chairman of the board, UTC said it would finance the share acquisitions with current cash balances and other readily available sources of funds.

UTC also said, “Additional value could be identified, and a higher price proposal for Diebold's shares could result. We are prepared to begin immediately and believe a definitive agreement can be completed within thirty days.”

Hartford, Connecticut-based UTC is a provider of technology products and services to the building systems and aerospace industries worldwide.

In January, UTC posted fourth quarter net income of $1.06 billion or $1.08 per share, compared to $865 million or $0.87 per share in the prior year quarter. Quarterly revenues grew to $14.7 billion from $12.8 billion in the prior year quarter.

Last month, the company reaffirmed 2008 earnings outlook of $4.65 to $4.85 per share. UTC also indicated that it continues to expect cash flow from operations less capital expenditures to equal or exceed net income, and that revenues for the year will increase to about $59 billion, including mid single digit organic growth. As of December 31, 2007, UTC had cash and cash equivalents of $2.90 billion.

UTX closed Friday's regular trading session at $70.51, down $1.66 or 2.30%. DBD ended Friday's regular trading session at $24.12, down 85 cents or 3.40%. In the after-hours, the shares gained 34 cents or 1.40%.