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Aerospace Mega-Deal: United Technologies Buys Out Rockwell Collins For $30 Billion

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Aerospace Mega-Deal: United Technologies Buys Out Rockwell Collins For $30 Billion
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United Technologies Corporation (NYSE: UTX) will acquire Rockwell Collins, Inc. (NYSE: COL) in a deal worth $30 billion, forging an aerospace behemoth producing virtually all types of avionics systems for commercial and defense aircraft.

The purchase price includes $23 billion and the acquisition of $7 billion in Rockwell Collins debt, the two companies said in a statement.

Word of the imminent merger had been circulating in recent days. UTC was down 2.18 percent at $117.92 in premarket trading and Rockwell Collins was up 1.37 percent at $130.61.

UTC is paying $140.00 per share, in cash and UTC stock.

New Company To Be Called Collins Aerospace Systems

UTC is expected to have global sales of approximately $67 billion to $68 billion following the transaction, based on estimated results.

Rockwell Collins and UTC Aerospace Systems will be integrated to create a new company called Collins Aerospace Systems. Kelly Ortberg will assume the role of chief executive officer with Dave Gitlin serving as president and chief operating officer.

Related Link: United Technologies For Rockwell Collins: Deal Or No Deal?

What It Means For Shareholders

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, subject to a 7.5 percent collar centered on UTC's August 22, 2017, closing share price of $115.69.

The deal is intended to close by the third quarter of 2018.

UTC reaffirmed its expectations for 2017 sales of approximately $58.5 billion to $59.5 billion and adjusted earnings in the range of $6.45 to $6.60 per share.

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Image Credit: By 4028mdk09 (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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