UTC acquires Rockwell Collins

 United Technologies Corp. (UTC) completed its $30 billion acquisition of Rockwell Collins, laying out a plan to emerge as an aerospace-focused company that comprises the newly formed Collins Aerospace and Pratt & Whitney, UTC announced. The company, meanwhile, will spin off non-aerospace units, including Otis and Carrier, into independent entities.

Completion of the acquisition came shortly after receipt of China clearance, the final of the three key regulatory approvals. China’s signoff followed US clearance in October and European approval in May.

 

Announced in September, the acquisition is one of the largest among aerospace suppliers, creating a ‘super supplier’ that combines UTC's portfolio of power generation, propulsion systems, and landing systems, and Rockwell Collins's expertise in avionics and cabin interior products.

Rockwell Collins joins UTC Aerospace System (UTAS) to form Collins Aerospace, retaining the well-established branding of the avionics, electronics, and interiors giant. Collins Aerospace is broken into six major business units—aerostructures, avionics, interiors, mechanical systems, mission systems, and powers and controls—and employs 70,000 people at 300 locations worldwide.

The new entity combined for $23 billion in annual sales in 2017; commercial business makes up about 75 percent of that total with government and military making up the rest. Forward-fit OEM applications represent about 60 percent of the sales. With a combined 16,000 engineers, the organization collectively invests about $3.1 billion in research and development.

Engine and propulsion specialist Pratt & Whitney will remain a separate business unit under UTC. Including Pratt & Whitney, UTC’s aerospace business totaled $39 billion in 2017 sales.

UTC anticipates the deal will be accretive to earnings per share next year and will generate more than $500 million in cost synergies over the next four years.

Coming with the acquisition are extensive plans for UTC to become solely an aerospace company with the separation of Otis and Carrier. Company executives believe the three-way separation will be complete in 2020, with separation activities occurring over the next 18 to 24 months.