May 19, 2020

United Technologies to merge aerospace operations with Rockwell Collins in $30bn deal

Mergers and acquisitions
Rockwell Collins
United Technologies Corp.
Pouyan Broukhim
2 min
United Technologies to merge aerospace operations with Rockwell Collins in $30bn deal

Jet engine specialist United Technologies Corp. (UTC) has agreed to buy fellow aircraft parts manufacturer Rockwell Collins that will see the two companies merge their aerospace operations under one behemoth, set to be named Collins Aerospace Systems.

At the value of $30bn, in the form of $23bn total equity value and $7bn incurred in debt, the deal will be one of the grandest transactions in aerospace history, with UTC paying an 18% premium at $140 per share through a combination of cash and shares of UTC common stock.

“This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems,” said Chairman and Chief Executive Officer of United Technologies, Greg Hayes.

“Together, Rockwell Collins and UTC Aerospace Systems will enhance customer value in a rapidly evolving aerospace industry by making aircraft more intelligent and more connected.”

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The acquisition of Rockwell Collins will not only complement UTC’s existing portfolio particularly well, but will also provide the company with more negotiating leverage over airplane manufacturers such as Airbus and Boeing and stand it in god stead against rivals such as Honeywell International.

“We are extremely pleased to announce this compelling transaction with UTC which is a testament to the value we have created for Rockwell Collins’ employees, customers and shareowners,” said Kelly Ortberg, Chairman, President and Chief Executive Officer of Rockwell Collins.

“The combination will enable us to compete more effectively for future business through continued investments in innovation, world-class integrated product offerings and the ability to retain the top talent in the industry.

“We look forward to the next chapter in Rockwell Collins’ long and proud history, as part of UTC.”

The deal is not UTC’s first acquisition, having bought Goodrich for $18bn back in 2012.

The transaction is expected to close by the end of the third quarter of 2018.

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