Honeywell made an approach to its rival conglomerate worth US$108 per share last week, a 17% premium to the current share price of US$92.42.
Cost savings were estimated to be US$3.5bn but United Technologies said any deal would face “would face insurmountable regulatory obstacles and strong customer opposition.”
Reports today said the companies also did not agree over who would run the company.
The latest proposal was said to have been structured as takeover rather than a merger with Honeywell bosses in charge.
Talks between the pair have been underway for months after United originally kick-started the discussions last year.
United said it had also rejected a previous proposal from Honeywell in September, again over fears it would be rejected by regulators.
The two are both massive entities, each worth around US$80bn and making everything from electronics controls and aero engines to lifts and plane parts.
A combined company would be worth more than US$160bn just adding the current market caps together.
Analysts said Boeing and Airbus would also not stand for having just one supplier making most of their aeroplanes.