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takyon writes:

Rockwell Collins is buying B/E Aerospace Inc, but investors are not impressed with visions of high-tech seats and toilets:

Aircraft electronics supplier Rockwell Collins said on Monday its $6.4 billion acquisition of interiors maker B/E Aerospace Inc will boost sales and spur new products, helping offset sluggish demand for equipment in new business and commercial jets. But investors and industry experts voiced skepticism about the deal, sending Rockwell's stock down 6.9 percent to $78.63, while B/E Aerospace shares rose 15.5 percent to $58.44, reflecting the bid premium.

Rockwell's acquisition, announced on Sunday, would triple its sales of equipment in new-generation widebody jetliners such as the Boeing 787 and Airbus A350, and "nearly double our position in the narrowbodies," Chief Executive Officer Kelly Ortberg said on a conference call with analysts, referring to top-selling jets such as the Boeing 737 and Airbus A320.

The companies have little product overlap, with Rockwell best known for avionics, flight controls and cabin connectivity, while B/E Aerospace is a major provider of aircraft seats, galleys, lighting and other systems. But Rockwell's plan to wire digital sensors and electronics into the galleys, lavatories and seats that B/E Aerospace drew some skepticism from industry experts. Lavatories and galleys are not items airlines typically use as selling points to customers. "If you're making a lavatory higher tech, it's got to improve customers experience or reduce cost," said Phil Toy, a managing director at aerospace consulting firm AlixPartners.

The purchase price is $8.3 billion when including debt.

Also at Bloomberg , USA Today , and The Wall Street Journal .

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