COL Rockwell Collins, Inc. (delisted)

By Thomas Gryta 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 24, 2018).

Chinese regulators have blessed United Technologies Corp.'s takeover of airplane-parts maker Rockwell Collins Inc., removing the final hurdle for a $23 billion combination that was struck more than a year ago.

The deal, announced in Sept. 2017 and approved by U.S. regulators in October, has been waiting months for a decision from Chinese authorities. Some investors had grown nervous the transaction could get caught up in trade tensions between Beijing and Washington, even though UTC executives had said they expected the transaction to get approved.

UTC said Friday it expected the deal to close within three business days. The approval is conditional and requires the divestiture of several businesses related to various aircraft systems. The decision is in line with expectations, the company said. European regulators approved the deal more than six months ago with similar requirements.

Shares of Rockwell surged 9.2% to $141.63 in New York trading Friday afternoon, while UTC shares gained 2.7% to $129.04. UTC agreed to pay about $140 per share in a mix of cash and stock.

The deal promises to reshape the market for aerospace parts and clears the way for a breakup of UTC, an industrial conglomerate. The company, which also makes Carrier air conditioners and Otis elevators, has been conducting a strategic review with an eye toward separating its operations.

In October, UTC Chief Executive Greg Hayes said the Rockwell deal's delay hadn't slowed work on the portfolio review. He said he expected to share his plans this month, but that the board wouldn't make a final decision until the Rockwell deal had closed. "I've made my views clear, I think focused businesses tend to do better over the long term," he said at the time.

Farmington, Conn.-based UTC, which has long operated in the shadow of rival General Electric Co., is now the more valuable company of the two following GE's painful collapse this year. UTC has a market value of roughly $100 billion, while GE's market value is around $68 billion.

UTC already owns one of the world's biggest jet-engine makers, Pratt & Whitney, and an aerospace division that also makes parts such as wheels and landing gear. It had about $60 billion in annual revenue last year.

Rockwell specializes in cockpit displays and communications systems for passenger jets and the military. Shortly before agreeing to sell itself to UTC, the Cedar Rapids, Iowa, company closed its roughly $6 billion acquisition of B/E Aerospace Inc., a maker of plane seats and interiors.

Yang Jie contributed to this article.

Write to Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

November 24, 2018 02:47 ET (07:47 GMT)

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