United Technologies Corporation Buys Rockwell Collins, Inc.

13 Pages Posted: 27 Nov 2018

See all articles by Luann J. Lynch

Luann J. Lynch

University of Virginia - Darden School of Business

Abstract

A senior industry analyst focused on aviation and aerospace at an investment advisory firm in Northern Virginia, pondered the potential implications of the acquisition by United Technologies Corporation of Rockwell Collins for aviation around the world. It was certain that the deal would impact not only the two companies involved, but it would also have a substantial impact on their customers, suppliers, employees, shareholders, and others.

Excerpt

UVA-C-2415

Oct. 26, 2018

United Technologies Corporation Buys Rockwell Collins, Inc.

Margaret Cortez, a senior industry analyst focused on aviation and aerospace at an investment advisory firm in Northern Virginia, pondered the potential implications of the acquisition by United Technologies Corporation (UTC) of Rockwell Collins for aviation around the world. The biggest acquisition in aerospace history had recently been announced, although many had speculated it might be forthcoming. No doubt the deal would impact not only the two companies involved, but it would also have a substantial impact on their customers, suppliers, employees, shareholders, and others. In its official press release announcing the acquisition, UTC Chairman and CEO Greg Hayes indicated:

This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems. Together, Rockwell Collins and UTC Aerospace Systems will 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 us to deliver more innovative products and services and provide greater value to our customers and shareowners.

Due to the complementary product offerings, the deal gave UTC “control over manufacturing of airline parts from ‘nose to tail.'” The price tag had been steep. UTC would pay $ 23billion for the company ($ 30billion including the assumption of around $ 7billion of Rockwell Collins' debt). Cortez decided that the potential impact of this acquisition might warrant some reflection. She wanted to start by looking at the effects of the acquisition on UTC's consolidated financial statements.

. . .

Keywords: acquired company debt, payment process, company balance sheets

Suggested Citation

Lynch, Luann J., United Technologies Corporation Buys Rockwell Collins, Inc.. Darden Case No. UVA-C-2415, Available at SSRN: https://ssrn.com/abstract=3291187

Luann J. Lynch (Contact Author)

University of Virginia - Darden School of Business ( email )

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Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

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