May 7, 2018

EU Commission clears buyout for UTC Rockwell

The European Union Commission has approved Farmington-based United Technologies Corp's $30 billion planned buyout of aviation systems maker Rockwell Collins, based in Iowa, the commission said.

The deal still awaits U.S. anti-trust clearance.

The EU's approval "is conditional on divestment of businesses in actuators, pilot controls, ice protection, and oxygen systems," Commissioner Margrethe Vestager said.

"When we take a trip on a plane, we usually don't think about all the different components that go into building the aircraft," Vestager said. UTC and Rockwell Collins are two of the biggest suppliers of components to aircraft makers including Boeing and Airbus.

"We need to ensure that competition is preserved for all of them," Vestager said.

"We can allow this merger to go ahead because in all the markets where we raised concerns, UTC has committed to divest activities covering the entire overlap between the two companies," she added.

UTC has offered to divest Rockwell Collins' pilot control equipment businesses, "mainly in the U.S. and Mexico," Vestager said, as well as Rockwell Collins' "entire global business in ice protection."

UTC also will divest two research projects in oxygen systems, she said.

"The commission found that the proposed commitments fully remove the overlaps between UTC and Rockwell Collins in the markets where competition concerns had been identified," Vestager said.

The EU's antitrust review of the pending deal was conducted through consulting with the U.S. Justice Department, Canadian Competition Bureau, and competition authorities of Brazil and China, she said.

Boeing initially expressed concerns about the UTC-Rockwell deal, but dropped its objections in April after signing a new agreement with both companies that it described as advantageous for all sides.

UTC CEO Gregory Hayes said in February that the Rockwell Collins buyout will be followed by a strategic review of his entire company to determine whether UTC is a "more valuable property together" or "better off in three separate businesses."

Hayes said UTC's board of directors is considering a potential split-up of the corporation into autonomous aerospace, elevator, and climate control businesses.

UTC currently operates East Hartford-based Pratt & Whitney, Otis Elevator, Carrier Corp., and other business units under a single corporate banner.

UTC intends to merge Rockwell with its North Carolina-based UTC Aerospace Systems unit, Hayes said, and will rename the combined businesses Collins Aerospace Systems, Hayes said. Rockwell makes flight controls, aircraft interiors, and related products, while UTAS makes jet engine controls, aircraft landing gear, brakes, and similar equipment.

Hayes also said he expects the merger to occur sometime this summer, followed by a decision on the potential corporate split-up by the end of this year.

Comments
Free E-Newsletters

Sign up now for our daily and weekly
e-newsletters! Click Here

 
Today's Poll Should out-of-state water companies be able to buy Connecticut water utilities?<>
ADVERTISEMENTS
Most Popular on Facebook
Copyright 2017 New England Business Media