Completes Acquisition Of Rockwell Collins

United Technologies has completed of its acquisition of Rockwell Collins and announced the company's intention to separate its commercial businesses, Otis and Carrier (formerly CCS), into independent entities. The separation will result in three global, industry-leading companies.

United Technologies, comprising Collins Aerospace and Pratt & Whitney, will be the preeminent systems supplier to the high-growth commercial aerospace and defense industry, with a unique portfolio of technologies and scale to invest through economic cycles. Combined sales of the two businesses totaled $39.0 billion in 2017 on a pro forma basis. Collins Aerospace supplies electrical, mechanical and software solutions across all major segments of the aerospace industry and serves commercial and military customers. Pratt & Whitney is a global leader in aircraft propulsion with a growing number of engine programs including the revolutionary Geared Turbofan commercial engine and the F135 military engine for the F-35 Joint Strike Fighter program.

The other companies would be Otis Elevator Company and Carrier.

"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 United Technologies Chairman and Chief Executive Officer Gregory Hayes. "Our products make modern life possible for billions of people. I'm confident that each company will continue our proud history of performance, excellence and innovation while building an even brighter future. As standalone companies, United Technologies, Otis and Carrier will be ready to solve our customers' biggest challenges, provide rewarding career opportunities, and contribute positively to communities around the world."

The proposed separation is expected to be effected through spin-offs of Otis and Carrier that will be tax-free for UTC shareowners for U.S. federal income tax purposes. Each spin-off is subject to the satisfaction of customary conditions, including final approval by UTC's Board of Directors, receipt of a tax opinion from counsel, the filing and effectiveness of a Form 10 registration statement with the U.S. Securities and Exchange Commission and satisfactory completion of financing.

UTC's acquisition of Rockwell Collins is one of the largest in aerospace history. It brings together Rockwell Collins and UTC Aerospace Systems to create Collins Aerospace Systems, an industry leader with a global presence of 70,000 employees in 300 sites and $23 billion in annual sales on a 2017 pro forma basis.

United Technologies expects the deal to be accretive to adjusted earnings per share in 2019 and to generate more than $500 million in run-rate pre-tax cost synergies by year four.

"Collins Aerospace brings together two great companies with unmatched expertise in developing electrical, mechanical and software solutions," said Hayes. "We will have a laser focus on developing innovative solutions for customers and generating strong returns for shareowners."

(Source: United Technologies news release)

FMI: www.utc.com