United Technologies Corporation (NYSE:UTX) and Rockwell Collins, Inc. (NYSE:COL) announced on Monday that they have signed a merger deal reportedly valued at around $30 billion.
United Technologies will acquire Rockwell Collins for roughly $30 billion as part of the recently signed deal thus boosting its already strong presence in aircraft engines and systems. The acquisition is expected to boost its capacity and presence in cockpit technology. The two companies have reportedly been holding talks for some time and thus it is not surprising that those talks led to an acquisition.
United Technologies already plays a huge role in aviation and the new deal is expected to place it even higher on the aviation ladder for both commercial and military clients. Rockwell Collins also stated that the merger will place them in a leading position as far as connectivity systems for aircrafts are concerned. Rockwell Collins will become part of United Technologies’ aerospace systems.
“This acquisition adds tremendous capabilities to our aerospace businesses.Together, Rockwell Collins and (United Technologies) Aerospace Systems will enhance customer value in a rapidly evolving aerospace industry by making aircraft more intelligent and more connected,” stated Greg Hayes, the CEO of United Technologies.
Hayes is expected to remain as the CEO of the conglomerate while Kelly Ortberg, the chairman, CEO and president of Rockwell will be the head of a new business known as Collins Aerospace. The deal is subject to regulatory approval and is expected come to a completion next year. It will go down as one of the biggest merger deals in Aviation history. It is considered to have the potential to cause massive changes in the aerospace parts market. This means the deal could give United Technologies more negotiating capacity over airplane manufacturers such as Airbus and Boeing Co (NYSE:BA).
Both Airbus and Boeing have been pushing suppliers including United Technologies to lower their prices. Analysts believe that United Technologies will be in a better position to avoid giving in to the pressure to lower prices.
United Technologies stock closed the latest trading session at $117.92 after tanking by 1.50 percent compared to the value of the stock during the previous close.