Combination Creates Premier Aerospace Systems Supplier
- Combined business will be well-positioned to meet rapidly evolving global customer demands
- Highly complementary to existing capabilities
- Enhances innovative systems capabilities and integrated digital product offerings, including avionics, flight controls and data services
- Expected to generate cost synergies in excess of $500 million
- Anticipate acquisition to be accretive to UTC adjusted earnings per share after first full year following closing
Aerospace supplier United Technologies Corp has struck a $30 billion agreement to buy avionics and interiors maker Rockwell Collins Inc, the companies said on Monday, in a deal that bulks up UTC’s power with plane makers by creating one of the world’s largest makers of civilian and defense aircraft components.
Farmington, Connecticut-based United Technologies will pay $140 per share for Rockwell Collins, split between $93.33 per in cash and $46.67 in stock, according to the companies.
The price represents a 17.6 percent premium to Rockwell’s $119 share price before news of the talks emerged on Aug. 4. Shares of Cedar Rapids, Iowa-based Rockwell Collins closed at $130.61 on Friday. U.S. markets were closed on Monday for the Labor Day holiday.
The acquisition price implies a total transaction value of $30 billion, including Rockwell Collins’ debt, and a total equity value of $23 billion. United Tech said it plans to fund the cash portion through debt issuances and cash on hand.
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Under the deal, the companies said that Rockwell Collins and UTC’s aerospace systems segment will be combined to create a new business unit named Collins Aerospace Systems.
“This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems,” UTC’s chairman and chief executive officer, Greg Hayes, said in the statement.
“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,” he said.
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