Image courtesy of Rockwell Collins
United Technologies Corp. (UTC) has acquired Rockwell Collins for an “implied” total equity value of $23 billion and a total transaction value of $30 billion, including Rockwell Collins’ net debt, Rockwell Collins said. A new business unit will be created when the transaction is completed, called “Collins Aerospace Systems”.
Kelly Ortberg will keep his CEO status (he was appointed as Rockwell Collins’ chief in 2013). UTC Aerospace Systems President Dave Gitlin will serve as president and COO.
“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,” Ortberg said of the two companies coming together. “We look forward to the next chapter in Rockwell Collins’ long and proud history, as part of UTC.”
News of a possible acquisition surfaced early August. Last week, reports said UTC and Rockwell Collins were nearing a deal worth more than $20 billion, which could be made official over the weekend. Rockwell Collins announced the purchase Monday. Analysts said the acquisition of Rockwell Collins would be the biggest acquisition ever completed in the history of the aerospace and defense manufacturing industry.
“This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems. 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,” said Greg Hayes, UTC chairman and CEO. “The integrated companies’ expertise in developing electrical, mechanical and software solutions will allow us to deliver more innovative products and services and provide greater value to our customers and shareowners.”
According to Rockwell Collins, UTC said it expects the acquisition to generate more than $500 million of run-rate pre-tax cost synergies by year four.