United Technologies Corp. (UTC) is expected to close on its $30 billion acquisition of Rockwell Collins imminently now that it obtained the final key approval from China. The Chinese State Administration for Market Regulation cleared the merger late last week, and UTC on Friday said the deal would close within three business days. China’s signoff followed U.S. clearance on October 2 and European approval on May 4.
Announced Sept. 4, 2017, the acquisition would be one of the largest among aerospace suppliers, creating a “super supplier” that combines UTC's portfolio of power generation, propulsion systems, and landing systems, and Rockwell Collins's expertise in avionics and cabin interior products. Rockwell Collins will be folded into a new Collins Aerospace group within UTC.
Regulatory approvals required the companies to shed certain overlapping businesses, including in the areas of trimmable horizontal stabilizer actuators (THSA), pilot controls (throttle quadrant assemblies and rudder brake pedal systems), and pneumatic wing ice protection.
UTC chairman and CEO Greg Hayes late last summer had conceded that the acquisition process had taken a “little bit longer” than anticipated, pushed back by a few months as the companies worked on divestitures to satisfy the regulatory demands. But in early September, Safran revealed an agreement to acquire Rockwell Collins’s actuators, pilot controls, and special products business, marking an important step in meeting those demands.
The companies expect that the merger will produce $500 million in synergies, and they are collaborating on areas where they can plan for alignment. UTC executive v-p and CFO Akhil Johri told investors recently that the engineering teams from both companies are among the most enthusiastic about the tie-up, noting he gets many calls from these teams asking when the acquisition will close and they can begin working together.
Hayes and Johri have confirmed that once the acquisition is complete, UTC would reveal a larger vision for its portfolio that could include the sale of certain units or a split of the company. However, this is not expected to affect the aerospace-related businesses.
