United Technologies is buying Rockwell Collins in a $30 billion deal, creating one of the world's largest makers of civilian and defense aircraft components. Fred Katayama reports.
United Technologies is buying Rockwell Collins for $30 billion, including debt. It's paying $140 per share in cash and stock. That's about an 18 percent premium. It plans to combine the aerospace divisions of both companies into a new business unit named Collins Aerospace Systems. It will be one of the world's largest producers of civilian and defense aircraft components. Disruptive Technology Advisers chief economist Max Wolff says the new company will reshape the industry. (SOUNDBITE) MAX WOLFF, CHIEF ECONOMIST, DISRUPTIVE TECHNOLOGY ADVISERS (ENGLISH) SAYING: "What it means is that defense behemoth emerging, probably, as we see, a major rationalization and rejiggering of the defense budgets. So, we know that, with the tax cuts and budgetary overhaul, long promised and, allegedly, soon to be delivered, by the Trump administration, it is going to be jousting for positions, for contracts, and this looks like a move ahead of that." United Technologies shares dropping on the news; Rockwell shares rose. The deal is expected to close in the third quarter of 2018 and save more than $500 million by the fourth year after its completion. It comes as major plane makers, such as Boeing, Airbus, and Bombardier, are pressing for price cuts. They are also trying to compete against suppliers on services and spare parts.