This Potential Acquisition would be among Biggest Ever in Aerospace
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August 4, 2017 - Bloomberg
- No guarantee efforts will lead to a transaction, people say
- Potential acquisition would be among biggest ever in aerospace
Jet-engine manufacturer United Technologies Corp. is weighing an acquisition of aviation-equipment supplier Rockwell Collins Inc., according to people familiar with the matter, in a deal that would potentially rank among the largest ever in the industry.
Rockwell Collins has a market value of $19.3 billion, raising the prospect that a transaction would top United Technologies' own $18 billion purchase of Goodrich Corp. in 2012. Billionaire Warren Buffett's Berkshire Hathaway Inc. completed the biggest aerospace deal last year when it bought Precision Castparts Corp. for $37 billion.
Representatives of United Technologies and Rockwell Collins declined to comment. There's no certainty the deliberations will lead to a transaction, the people said, asking not to be identified because the details aren't public. It's unclear whether the companies are currently in talks, the people said.
A deal would give the aerospace manufacturers greater heft as Boeing Co. and Airbus SE squeeze suppliers for price reductions amid a planned production increase of narrow-body jetliners. While United Technologies makes a variety of aircraft parts, Rockwell Collins specializes in products that would complement its lineup: avionics and aircraft interiors.
"They would be investing in two of the real interesting and hot areas in aircraft today," said Kevin Michaels, an aerospace consultant. "It completes the portfolio and there's very little overlap."