United Technologies to buy Rockwell Collins in multi-billion dollar deal

United Technologies to buy Rockwell Collins in multi-billion dollar deal”

USA -based industrial conglomerate United Technologies announced it had reached an agreement to buy aerospace supplier Rockwell Collins for $30 billion, including debt. This dividend represents a yeild of $1.01 which is the dividend as a percentage of the current share price.

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.

United Tech had planned $2 billion in buybacks in the second half of 2017, he said.

United Technologies is acquiring Rockwell Collins for about 30 billion US dollars in order to expand its aerospace business.

CFM competes with United Tech subsidiary Pratt & Whitney.

Both companies touted the megadeal as giving United more leverage with customers, such as Boeing and Airbus, while also offering those customers cost savings from United operating with larger economies of scale.

Wells Fargo Securities analyst Sam Pearlstein said the combined company "makes sense given the competitive threats from original equipment manufacturers, limited overlap and the ability to offer a broader product line".

On the other hand, Boeing buying Rockwell - which supplies chief Boeing rival Airbus - might make Rockwell's future contract negotiations with Airbus awkward, a defense industry banker said.

United Technologies sold its Sikorsky helicopter division to Lockheed Martin Corp for $9 billion in 2015. Avionics maker Rockwell Collins, headquartered in Cedar Rapids, is being purchased by Connecticut-based rival United Technologies for 23-billion dollars.

Rockwell Collins announced that its Board of Directors has initiated a stock buyback program on Friday, July 7th that permits the company to buyback $200.00 million in shares. Hayes did not rule out such sales in the longer term.

"(The deal) gives us the scale to do things we couldn't do on our own", Hayes said.

United Technologies has agreed to pay out about $140 a share in the merger.

The company said it plans to request an accelerated approval of the drug, which it said the Food and Drug Administration already granted fast-track status as a breakthrough therapy. The short-interest ratio increased to 1.0 and the percentage of shorted shares is 0.04% as of August 15. UTC shares were down 5.2 percent to $111.82 after its announcements and Boeings comments were made public. The company needs to break up some of its assets to "unlock the conglomerate discount and bring this deal to its ultimate logic", according to Vertical Research Partners analyst Jeff Sprague.

The airplane parts makers, which spent the last month trying to reach a deal, are expected to have combined sales of almost $70 billion in 2017.

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