November 27, 2018

UTC plans to split into 3 separate companies

United Technologies Chairman and CEO Gregory Hayes.

Farmington conglomerate United Technologies Corp. said late Monday that it closed its $30 billion acquisition of Iowa-based aviation systems maker Rockwell Collins and that it intends to split into three separate companies.

The announcement came amid speculation that UTC would split up the company to improve shareholder value.

Under the reorganization, UTC's largest company will be its aerospace unit that will include Collins Aerospace Systems -- formed through the combination of UTC Aerospace Systems and Rockwell Collins -- and Pratt & Whitney.

The other two companies will be: Otis, a manufacturer of elevators, escalators and moving walkways; and Carrier, a global provider of HVAC, refrigeration, building automation, fire safety and security products.

"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 CEO 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."

Each of the new companies will be multibillion-dollar businesses.

Collins Aerospace and Pratt & Whitney had combined sales of $39 billion in 2017. Otis generated $12.3 billion in revenue last year while Carrier had 2017 sales of $17.8 billion.

The proposed separation is expected to be effected through spin-offs of Otis and Carrier that will be tax-free for UTC shareholders, the company said. That will require regulatory and board approval.

Hayes will oversee the transition and continue in his current role as UTC chairman and CEO following the separation, which is expected to be completed in 2020.

Read more

UTC's Hayes: Sikorsky divestiture created aerospace need ahead of Rockwell deal

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