United Technologies to Acquire Rockwell Collins for $30 Billion

United Technologies has decided to acquire Rockwell Collins under an agreement for $140.00 per share, in cash and UTC stock - i.e at a value of $30 Billion. Rockwell Collins, a leader in aviation and high-integrity solutions for commercial and military customers, is globally recognized for its leading-edge avionics, flight controls, aircraft interior and data connectivity solutions. On a 2017 pro forma basis, its current estimated sales are greater than $8 billion.

The acquisition adds tremendous capabilities to UTC’s aerospace businesses and strengthens its complementary offerings of technologically advanced aerospace systems. Together, Rockwell Collins and UTC Aerospace Systems will now enhance customer value in a rapidly evolving aerospace industry by making aircraft more intelligent and more connected.

The integrated companies' expertise in developing electrical, mechanical and software solutions will allow delivering more innovative products and services, and providing greater value to customers and shareholders. This combination will also create new opportunities for employees of both companies to advance innovation in a growing and dynamic industry.

Under the terms of the agreement, each Rockwell Collins shareowner will receive $93.33 per share in cash and $46.67 in shares of UTC common stock, subject to a 7.5 percent collar centered on UTC's August 22, 2017 closing share price of $115.69. UTC expects to fund the cash portion of the transaction consideration through debt issuances and cash on hand, and the company is committed to taking actions to maintain strong investment grade credit ratings. The transaction is projected to close by the third quarter of 2018, subject to approval by Rockwell Collins' shareowners, as well as other customary closing conditions, including the receipt of required regulatory approvals. The purchase price implies a total equity value of $23 billion and a total transaction value of $30 billion, including Rockwell Collins' net debt.

On a pro-forma 2017 basis, UTC is expected to have global sales of approximately $67 to $68 billion following the transaction, based on estimated results. It expects the combination will be accretive to adjusted earnings per share after the first full year following closing and generate an estimated $500+ million of run-rate pre-tax cost synergies by year four. Upon completion of the transaction, Rockwell Collins and UTC Aerospace Systems will be integrated to create a new business unit named Collins Aerospace Systems. Kelly Ortberg will assume the role of Chief Executive Officer with Dave Gitlin serving as President and Chief Operating Officer.

UTC today also reaffirmed its expectations for 2017 sales of approximately $58.5 to $59.5 billion and adjusted earnings in the range of $6.45 to $6.60 per share.