United Technologies agrees to buy Rockwell Collins for US$30 billion

United Technologies, the jet-engine maker, has agreed to buy Rockwell Collins, the aircraft parts manufacturer, for US$30 billion, including any debt. It has also been confirmed that the Rockwell Collins and UTC aerospace systems operations will be merged to create a new business unit, Collins Aerospace Systems.
The basis of the deal will see Rockwell Collins’ shareholders receiving US$140.00 per share in both stock and cash – US$93.33 in cash and US$46.67 in United Technologies stock according to a statement from the companies. This offer is based on a premium of US$18.00 to Rockwell Collins’ closing share price on August 3, the day prior to media reports of the Rockwell bid.
According to a statement from UTC’s chairman and chief executive officer, Greg Hayes, “This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems.” He then added that “Together, Rockwell Collins and UTC Aerospace Systems will enhance customer value in a rapidly evolving aerospace industry by making aircraft more intelligent and more connected.”
The offer includes US$7 billion in Rockwell’s debt, but is expected to save more than $500 million by the fourth year after its completion, according to a statement from the two companies.
Morgan Stanley & Co was the financial adviser to United Tech and Wachtell, Lipton, Rosen & Katz was its legal adviser.
J.P. Morgan Securities LLC and Citigroup Global Markets Inc were Rockwell’s financial advisers, while Skadden, Arps, Slate, Meagher & Flom was its legal advisor.