United Technologies is staring at what will become the largest deal in the aerospace industry once they finalize the deal to acquire Rockwell Collins. The deal is expected to cost the technology giant $30 billion including debt. United Technologies is known through several brands such as Pratt & Whitney and Otis escalator and specializes in the manufacture of a high-performance aircraft engine. According to the terms of the agreement, the deal will see Rockwell Collins shares sold for $140 per share. The two companies agreed that Rockwell investors would receive $93.33 for each share in cash. The rest would be redeemed as shares in United Technologies. The exact amount is $46.67 per every United Technology share. According to reports from the Wall Street, the current price is said to be 18 percent premium over the net worth of the company on 3rd August. This is the day before the acquisition news was announced to the public. The move to buy Rockwell Collins is seen as a move to become a worthy competitor in a market that is dominated by Airbus and Boeing. Rockwell is a company that used to specialize in the production of avionics and electronics crucial in the airline industry. Rockwell is credited with the design of F-35 fighter jet.
Gregory J. Hayes who is the chairman of United Technologies said that the acquisition of the new venture would help the company develop technologically advanced systems. According to sources close to the deal, the deal will finalize in the last quarter of 2018. Before the acquisition, Rockwell Collins had a market value of $21.2 billion. Following the news that it would be acquired, its market value rose by 9.8 percent while that one of United Technologies fell by 2.9 percent. At the moment, United Technologies has a market value of about $94.2 billion. United Technologies has maintained its corporate headquarters in Farmington, Connecticut. This is not the first time that the company has sought to grow through an acquisition. For instance, five years ago, the company announced that it had acquired a company known as Goodrich. This deal was worth $18 billion. The company recently declined a deal to acquire an entity known as Honeywell International. The company had reasons to believe that the deal would be blocked by antitrust laws related to the company. Last year also saw another big deal in the aerospace industry when Precision Castparts was acquired by Berkshire Hathaway that is owned by Warren E. Buffett.