General Electric Co. agreed to buy Honeywell International Inc. for about $48.4 billion in stock and assumed debt. Jack Welch agreed to extend his term as chairman and chief executive by at least eight months to help oversee the company's biggest-ever purchase.

General Electric will exchange 1.055 shares for each share in the aerospace and automated controls company, or about $55.12, based on Friday's closing prices. General Electric's stock fell as much as 6.2 percent in late morning trading, while Honeywell rose as much as 16 percent. Welch, who was scheduled to retire in April, has increased General Electric's market value by more than $500 billion during his tenure of almost two decades.

The Honeywell purchase combines the companies' complementary businesses in aerospace, power, plastics and industrial systems. General Electric's bid topped a $50-a-share, or $40 billion, offer from United Technologies Corp. made last week. General Electric is paying $45 billion in stock and assuming $3.4 billion in Honeywell debt.

The purchase comes 10 months after the former AlliedSignal bought Honeywell and assumed the name. Honeywell's shares have dropped by about a third since then, as the company lowered profit forecasts for this year and next because of higher costs and slowing demand.

General Electric still expects to name a new chairman before year-end. Three internal candidates are presumed to be in the running to take over the chief executive post: GE Medical Systems chief Jeffrey Immelt, GE Power Systems head Robert Nardelli and GE Aircraft Engines leader James McNerney. The company had been expected to name one to Welch's post as soon as this month.