The United States Department of Justice has reportedly announced that it has approved United Technologies Corporation’s (UTC) $30 billion acquisition of avionics and IT systems manufacturer Rockwell Collins Inc. Reports claim, the Department’s approval came after UTC agreed to divest two businesses related to Rockwell Collins.
Reportedly, the Justice Department requires the Connecticut-based conglomerate to divest Rockwell Collins’ aircraft altitude maintenance systems business – that adjusts the aircraft horizontal tail surface to maintain altitude – and the business of pneumatic ice protection system that rids aircraft wings of ice.
According to a press release by the Department of Justice, without the two divestitures, the market for trimmable horizontal stabilizer actuators (THSAs) and for ice protection systems would not remain competitive as the acquisition would be merging two of the leading THSAs producers as well as two of the three pneumatic ice protection systems suppliers in the world.
The Antitrust Division’s Assistant Attorney General, Makan Delrahim reportedly stated that the requirement of divestitures makes sure that consumers continue to benefit from the competition that is created in the supply of these two critical aircraft safety components. Delrahim further added that the solution allows the eventual buyers of the divestitures to compete strenuously in offering top-quality systems and services to consumers.
UTC reportedly released a statement saying that the Rockwell Collins deal is going ahead satisfactorily and that the approval from the Department of Justice is the latest milestone it has reached. The company added that it will announce the deal’s final closing after it receives all the approvals that are necessary. The CEO of UTC, Greg Hayes, stated that he anticipates the deal to close by 30th of September.
For the record, UTC would be significantly expanding its aerospace business through the latest deal. However, it also raises questions about the continued operations of UTC’s building system businesses, Carrier heating & cooling and Otis elevators.
According to reports, later this year, the company will announce whether it will dissolve its business portfolio and solely focus on the aviation business.