United Technologies (UTC) is to acquire Rockwell Collins for $30bn, a deal that is expected to save in excess of $500m in operating costs.
Rockwell Collins is active in avionics, flight controls, aircraft interior and data connectivity solutions for commercial and military customers. On a 2017 pro forma basis, its estimated sales are said to be greater than $8bn.
Following the acquisition, Rockwell Collins and UTC Aerospace Systems will be integrated to create Collins Aerospace Systems.
"This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems," said UTC chairman and CEO Greg Hayes. "The integrated companies' expertise in developing electrical, mechanical and software solutions will allow us to deliver more innovative products and services.”
Under the terms of the agreement, each Rockwell Collins shareowner will receive $93.33 per share in cash and $46.67 in shares of UTC common stock. According to UTC, the purchase price implies a total equity value of $23bn and a total transaction value of $30bn, including Rockwell Collins' net debt.
On a pro-forma 2017 basis, United Technologies is expected to have global sales of approximately $67 to $68bn following the transaction, based on estimated results. UTC has also reaffirmed its expectations for 2017 sales of approximately $58.5 to $59.5bn and adjusted earnings in the range of $6.45 to $6.60 per share.
The transaction is expected to close by the third quarter of 2018, subject to approval by Rockwell Collins' shareowners, as well as other customary closing conditions, including the receipt of required regulatory approvals.
Five ways to prepare for your first day
If I may add my own personal Tip No. 6 it goes something like this: From time to time a more senior member of staff will start explaining something...