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Two companies that supply parts to the likes of Boeing, Airbus, and Lockheed Martin will merge in one of the largest aerospace deals ever:
United Technologies Corp. agreed to buy Rockwell Collins Inc. for about $23 billion, creating an aerospace behemoth that can outfit jetliners and warplanes from tip to tail.
The transaction, one of the biggest in aviation history, creates an aircraft-parts giant better positioned to withstand the squeeze from planemakers Boeing Co. and Airbus SE for pricing discounts and higher output. The resulting company will boast a broad suite of products for commercial aircraft, from Rockwell Collins's touchscreen cockpit displays to jet engines made by the Pratt & Whitney division of United Technologies.
"This is a significant deal for UTC and the aviation industry in general," Hans Weber, president of San Diego-based consultancy Tecop International Inc., said in an email. By buying Rockwell Collins, which delivers avionics systems for the U.S. planemaker's 787, "UTC becomes a critically important supplier to Boeing and will have a strong negotiating position as Boeing is putting price pressure on suppliers."
The deal is $23 billion, or $30 billion including debt. The combined company is expected to have annual sales of $34 billion.
(Score: 3, Insightful) by MrGuy on Wednesday September 06 2017, @07:24PM
The US government, and specifically the Department of Defense, would be ill served if this merger went through (as might a number of other governments).
The reason is that they can get lower costs by putting items out for bid. The fewer bidders, the higher prices (on average) they will pay.
You can be as cynical as you want on whether there's a military industrial complex out there trying to siphon off as much taxpayer money as they want, and that being the point of the merger. But purely from the government side (the government that would actually need to approve the merger for it to happen) this is clearly a bad deal. We'll learn a lot by how the regulatory review of this merger plays out.