Aerospace, Technology

Talk is in the air of aerospace megadeal

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Including a range of plastics, ceramics and metals like titanium with varying results

New York-London — Jet-engine manufacturer United Technologies is weighing an acquisition of aviation equipment supplier Rockwell Collins, according to people familiar with the matter, in a deal that would potentially rank among the largest so far in the aerospace industry.

Rockwell Collins has a market value of $19.3bn, raising the prospect that a transaction would top United Technologies’ own $18bn purchase of Goodrich in 2012.

Warren Buffett’s Berkshire Hathaway completed the biggest aerospace deal in 2016, when it bought Precision Castparts for $37bn.

Representatives of United Technologies and Rockwell Collins declined to comment.

There was no certainty the deliberations would lead to a transaction, the people said, asking not to be identified because the details were not public. It was unclear whether the companies were in talks, the people said.

“They would be investing in two of the real interesting and hot areas in aircraft today.”

A deal would give the aerospace manufacturers greater heft as Boeing and Airbus 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 specialises in products that would complement its line-up: avionics and aircraft interiors.

“They would be investing in two of the real interesting and hot areas in aircraft today,” said Kevin Michaels, a consultant.

“It completes the portfolio and there is very little overlap.”

Shares in Rockwell Collins rose to a record $119 at the close of trading on Friday in New York, before news of the potential deal. The shares climbed as much as 12% more in late trading. United Technologies, with a market value of $97bn, was little changed.

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