* Could spend $2 billion to $3 billion on takeovers this year

* Sees valuations becoming "more realistic"

(Recasts throughout)

By Scott Malone

BOSTON (Reuters) - Diversified U.S. manufacturer Honeywell International Inc's (HON.N: Quote, Profile, Research) could spend as much as $3 billion on takeovers this year as falling markets and a credit crunch push down sellers' expectations on prices, the company's chief financial officer said on Friday.

"You've seen the trading values of public companies come down and that is very helpful to us," Dave Anderson said in a phone interview with Reuters. "Some of that needs to mature a little bit so that people don't look at us or others as just being opportunistic.

"As those valuations mature, as people are affected differently by the economy or perhaps they don't have the strength of the balance sheet or the credit capacity that we do..., what we've seen is people being much more realistic," he added.

Honeywell has already agreed to acquire safety-gear maker Norcross Safety Products for $1.2 billion.

"Between where we are today and $2 (billion) to $3 billion is reasonable to expect for us this year," Anderson said.