News
Boeing objects to UTC US$30 billion Rockwell Collins merger
September 8th 2017
Boeing said on Thursday it would request that regulators scrutinise the US$30 billion merger of United Technologies and aviation equipment supplier, Rockwell Collins. Read More » The aerospace giant said last Monday it intended “to take a hard look at the proposed combination of United Technologies and Rockwell Collins”. It continued that it was “sceptical” about the deal between the two major suppliers to the aerospace industry “would be in the best interest of – or add value to – our customers and the industry”.
If Boeing decides the merger is “inconsistent with those interests, we would intend to exercise our contractual rights and pursue the appropriate regulatory options to protect our interests”, Boeing said.
United Technologies Corp. (UTC) and Rockwell Collins this week announced they had reached a definitive agreement under which UTC would acquire Rockwell Collins for US$140 per share, in cash and UTC stock.
Rockwell Collins is a supplier of high-integrity aviation solutions, particularly avionics, flight controls, aircraft interior and data connectivity solutions. On a 2017 pro forma basis, its estimated sales are greater than US$8 billion.
“This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems,” said UTC chairman and CEO, 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.”
“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,” said Kelly Ortberg, chairman, president and CEO of Rockwell Collins.
The purchase price implies a total equity value of US$23 billion and a total transaction value of US$30 billion, including Rockwell Collins' net debt.
On a pro-forma 2017 basis, UTC is expected to have global sales of approximately US$67-US$68 billion following the transaction, based on estimated results.
If the transaction is completed, Rockwell Collins and UTC Aerospace Systems will be integrated into a new business unit, Collins Aerospace Systems. Kelly Ortberg will assume the role of CEO with Dave Gitlin serving as president and COO.
