United Technologies Buys Rockwell
Collins For $23B
September 5, 2017
Technologies and Rockwell Collins have reached a definitive agreement
under which United Technologies will acquire Rockwell Collins for
$140.00 per share, in cash and UTC stock.
Rockwell Collins is a leader in aviation and high-integrity solutions
for commercial and military customers and is globally recognized for its
leading-edge avionics, flight controls, aircraft interior and data
connectivity solutions. On a 2017 pro forma basis, its estimated sales
are greater than $8 billion.
"This acquisition adds tremendous capabilities to our aerospace
businesses and strengthens our complementary offerings of
technologically advanced aerospace systems," said UTC Chairman and Chief
Executive Officer Greg Hayes. "Together, Rockwell Collins and UTC
Aerospace Systems will enhance customer value in a rapidly evolving
aerospace industry by making aircraft more intelligent and more
"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," Hayes continued. "This combination will also
create new opportunities for the talented employees of both companies to
advance innovation in a growing and dynamic industry. Importantly, UTC
and Rockwell Collins share cultures of mutual trust and respect,
accountability and teamwork that will allow us to work together to
achieve our common goals."
expects the combination will be accretive to adjusted earnings per share
after the first full year following closing and generate an estimated
$500+ million of run-rate pre-tax cost synergies by year four.
"We are extremely pleased to announce this compelling transaction with
UTC which is a testament to the value we have created for Rockwell
Collins' employees, customers and shareowners," said Kelly Ortberg,
Chairman, President and Chief Executive Officer of Rockwell Collins.
"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. We look forward to the next chapter in Rockwell Collins'
long and proud history, as part of UTC."
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. UTC expects to fund the cash portion of
the transaction consideration through debt issuances and cash on hand,
and the company is committed to taking actions to maintain strong
investment grade credit ratings. The transaction is projected 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.
The purchase price implies a total equity value of $23 billion and a
total transaction value of $30 billion, including Rockwell Collins' net
On a pro-forma 2017 basis, UTC is expected to have global sales of
approximately $67 to $68 billion following the transaction, based on
Upon completion of the transaction, Rockwell Collins and UTC Aerospace
Systems will be integrated to create a new business unit named Collins
Aerospace Systems. Kelly Ortberg will assume the role of Chief Executive
Officer with Dave Gitlin serving as President and Chief Operating
"We have demonstrated we can successfully integrate large acquisitions
into our business and I have full confidence that the team has the
capability to do it again," Hayes said. "Once we have completed the
integration of Rockwell Collins and made progress towards reducing
leverage back to historical levels, we will have an opportunity to
explore a full range of strategic options for UTC."
UTC today also reaffirmed its expectations for 2017 sales of
approximately $58.5 to $59.5 billion and adjusted earnings in the range
of $6.45 to $6.60 per share.*