United Technologies buys Rockwell Collins for $30 billion
With the completion of United Technologies Corporation’s (UTC) $30 billion acquisition of Rockwell Collins, one of the world’s largest aerospace equipment suppliers, the effects will ripple throughout the aviation industry.
The new acquisition, which was closed on November 26, will combine the two into the newly named Collins Aerospace – the combination of Rockwell Collins and UTC Aerospace Systems. And its focus will be solely aeronautical with the rooting out of what appear to be non-core businesses. The days of unfocussed, under-performing conglomerate activity are over for UTC.
While UTC is to remain the holding company for Collins Aerospace and Pratt & Whitney, it intends to hive off its non-aero businesses —Otis and Climate, Controls & Security (“CCS”) — into two separate entities. There is also a proposal to create Otis Elevator Company as an independent identity. Both of these plans are subject to approvals from regulators and UTC’s board of directors.
Back in March this year, UTC’s CEO Gregory Hayes, said the acquisition was the year’s “top priority”. The process has taken longer than originally expected when it started just over a year ago now.
Hayes will remain the CEO of UTC, while Kelly Ortberg will serve as the CEO of Collins Aerospace. Kent Statler, who was previously vice president and chief operating officer for Rockwell Collins’ commercial systems division, has been named head of the Collins Aerospace strategy avionics business unit.
By acquiring Rockwell Collins, UTC’s aerospace holdings now include Collins’s avionics manufacturing, defence business and interiors unit – bringing Collins Aerospace net sales to $23 billion on a 2017 pro forma basis.
Rockwell Collins’ most recent 10-K report indicated $1 billion in sales to business and regional aviation customers.
“With the addition of Rockwell Collins, we will now have an aerospace business that will have sales of roughly $50 billion by 2020,” Hayes said.
“Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth, lead its industry in innovation and customer focus, and maximize value creation,” said Hayes. “I’m confident that each company will continue our proud history of performance, excellence and innovation while building an even brighter future.