United Tech Nears Deal to Buy Rockwell Collins for More Than $20 Billion -- Update
August 29 2017 - 11:50AM
Dow Jones News
By Dana Mattioli, Joann S. Lublin and David Benoit
United Technologies Corp. is nearing a deal to buy Rockwell
Collins Inc. for more than $20 billion, a tie-up that would create
one of the world's biggest aircraft-equipment makers.
The companies are discussing a per-share price for Rockwell of
$140 or less and could come to an agreement as soon as this
weekend, according to people familiar with the situation. Rockwell
shares closed at $127.99 Monday, giving the company a market value
of $20.8 billion.
As with all acquisition talks, it is possible they could hit a
snag and not result in a deal, or the expected price could
change.
The deal would boost United Technologies' business supplying
Boeing Co. and Airbus SE as the aerospace industry ramps up for a
new generation of jets. The company already owns one of the world's
biggest jet-engine makers, Pratt & Whitney, part of an
aerospace division that also makes parts such as wheels and landing
gear.
Rockwell specializes in cockpit displays and communications
systems for passenger jets and military programs. In April, the
Cedar Rapids, Iowa, company closed its roughly $6 billion
acquisition of B/E Aerospace Inc., a maker of plane seats and
interiors.
Since word of the talks surfaced this month, several analysts
have said they don't expect significant antitrust issues given
United Technologies and Rockwell make different airplane parts. But
airplane manufacturers might voice concerns about any consolidation
among their suppliers. Boeing and Airbus have also been nudging
their way into aftermarket business to capture some of the profit
from selling and servicing parts -- putting them on a collision
course with suppliers.
The possibility of a United Technologies deal for Rockwell
caught some analysts by surprise. In June, United Technologies
Chief Executive Greg Hayes told analysts the Farmington, Conn.,
company was looking to spend roughly $1 billion on acquisitions
this year. It had about $7 billion in cash.
"As far as bigger M&A, it's something we always look at, but
I am reluctant to go out and pay some of the prices that we see
today," Mr. Hayes said at the Paris Air Show.
United Technologies has a market value of about $92 billion.
Last year, the industrial giant, which also makes Carrier climate
control systems and Otis elevators, rebuffed unsolicited takeover
approaches from Honeywell International Inc.
Thomas Gryta contributed to this article.
Write to Dana Mattioli at dana.mattioli@wsj.com, Joann S. Lublin
at joann.lublin@wsj.com and David Benoit at
david.benoit@wsj.com
(END) Dow Jones Newswires
August 29, 2017 11:35 ET (15:35 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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