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UTC to Acquire Rockwell Collins for $30 billion

United Technologies provides innovative products and services to the global aerospace and building industries. We are committed to taking actions that support the long-term sustainable growth of the company.

This transaction will be transformational for UTC and our aerospace franchise. Our decision to move forward with this transaction is line with this transaction is in line with our strategy and key priorities, including:

  • Innovation for growth: This transaction will add highly complementary products, capabilities and digital innovations to our existing aerospace systems business. It will also allow us to expand our R&D capabilities with further capacity to invset and innovate in an evolving, high-growth industry
  • Disciplined capital allocation: We deploy capital to further our strategic objectives. This transaction is expected to be accretive to EPS after the first full year following the closing. It will enable us to better satisfy the demands of our customers and position for us to generate significant long-term value for our share-owners.
  • Flawless Execution: This acquisition will enable us to deliver better performance, and better, more integrated solutions to our customers by combining capabilities and technology that will meet customer demand for aircraft that are intelligent, more integrated and more connected. We will also have access to a broad field support network that will allow us to better serve our customers in the aftermarket.

Transaction Details:

United Technologies and Rockwell Collins announced they have reached an agreement whereby UTC will acquire Rockwell Collins and combine the business with UTC Aerospace Systems

  • Upon completion of the transaction, Rockwell Collins and UTC Aerospace Systems will be integrated to create a new business unit name Collins Aerospace System. Kelly Ortberg will assume the role of Chief Executive Officer with Dave Gitlin serving as President and Chief Operating Officer
  • No final decision has been made as to where the combined business will be headquartered.
  • Total transaction value - $30 Billion (including -$7 Billion of assumed Rockwell Collins net debt) - a fair price for a great company
  1. $23 Billion consideration funded w/ two thirds cash and one third UTC stock
  2. Accretive to adjusted EPS after first full year following closing.
  • $500 Million+ run-rate synergies by year 4, or% of sales - primarily from reduced public-company costs, procurement and SG&A
  • Expect to raise $14Billion in debt, committed to taking actions to maintain investment-grade credit ratings
  • The transaction is expected to close by the third quarter of 2018
  • The combined UTC Aerospace Systems and Rockwell Collins business is expected to generate $23 Billion in 2017 sales on a pro-forma basis, with a healthy mix of revenue across markets and regions

Strategic Rationale

By combining UTC Aerospace Systems and Rockwell Collins we will create a more diversified global aerospace systems supplier equipped to better serve our customers in a high-growth industry that is rapidly evolving.

With this diversified and strengthened portfolio, the combined company will be well-positioned in a high-growth market with solid industry fundamentals

UTC will remain laser focused on key priorities and executing on the commitments we have made - we remain CONFIDENT about 2017 revenue and earnings expectations and remain FOCUSED on delivering these results.

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