UTC To Buy Rockwell-Collins
United Technologies (UTC) announced a deal to buy Rockwell-Collins over the weekend, growing United Technologies' already huge aerospace portfolio. UTC already owns, among others, Pratt & Whitney, the jet engine manufacturer. The $23 billion purchase price for Rockwell-Collins will be among the biggest aerospace acquisitions ever. Executives for the companies announced that they expect the merger will create hundreds of millions of dollars in cost savings, likely from headcount reductions and combining of facilities.
News of the acquisition was not met warmly. UTC’s stock was down 5% on Tuesday following the announcement. Boeing and Airbus, wary of a concentration of negotiating power among their suppliers, both released statements opposing the merger. Boeing said of the proposal, “Until we receive more details, we are skeptical that it would be in the best interest of—or add value to—our customers and industry. Should we determine that this deal is inconsistent with those interests, we would intend to exercise our contractual rights and pursue the appropriate regulatory options to protect our interests.”