Worldwide

United Technologies to acquire Rockwell Collins for 30 bln Dollars

Rockwell Collins designs and builds avionics systems for business aircraft, as well as interiors thanks to the acquisition in 2016 of B/E Aerospace. Winslow Evans & Crocker Inc. bought a new position in shares of Rockwell Collins during the 2nd quarter worth approximately $124,000.

"Once we are confident in the merger, we'll see what makes more sense in shareholder value creation with our portfolio".

United Technologies is to acquire Rockwell Collins for $140.00 per share in cash and UTC stock - about $30 billion - the companies have announced.

At this time, Moody's expects any potential downgrade of United Technologies' senior unsecured and junior subordinated debt ratings to be limited to one notch. COL, +0.30% for about $30 billion including debt, the largest ever aerospace deal, the companies said Monday.

Boeing said in an emailed statement the Chicago-based aerospace company is skeptical that the transaction would be in the best interest of industry and clients.

Over the weekend, United Technologies (NYSE: UTX) managed to close the much awaited acquisition deal with aircraft parts manufacturer Rockwell Collins for almost $30 billion, which includes $7 billion in net debt.

The purchase price values Rockwell Collins at $140 per share, a 17.6 percent premium to the company's $119 price before Bloomberg first reported details of a potential offer from UTC on August 4.

Rockwell chairman, president and chief executive Kelly Ortberg will run a new business known as Collins Aerospace that will combine the parts businesses.

On pro forma 2017 basis, the combined company is expected to have global sales of $67 billion to $68 billion when adding Rockwell's projected $8 billion. The aerospace company reported $1.64 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.58 by $0.06. United Tech shares, part of the Dow Jones industrial average, fell 3 percent to $114.37, reflecting the expected dilution in earnings from the stock-and-cash deal, analysts said.

"We'll be able to do predictive analytics that many others can't do, and that's how you add value to airline customers", Hayes said, referring to data-crunching that allows airlines to spot problems in engines and other components before they fail. With the acquisition of Rockwell Collins, which delivers avionics systems for the United States planemaker's 787, "UTC becomes a critically important supplier to Boeing and will have a strong negotiating position as Boeing is putting price pressure on suppliers".

The two companies expect the acquisition to result in $500 million in "synergies", or costs savings, within four years.

Rockwell's shares rose 0.3 percent to $131.00 in afternoon trading. "This combination will also create new opportunities for the talented employees of both companies to advance innovation in a growing and dynamic industry".



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