US firms agree aviation merger deal

Image copyright
Getty Images

Image caption

Merger could give firms greater negotiation power over aviation giants, Boeing and Airbus

Industrial group United Technologies Corporation (UTC) has agreed to buy airline parts maker Rockwell for $23bn (£17.8bn).

The merger is one of the biggest deals in aviation history and is expected to be completed next year.

It has the potential to shake up the market for aerospace parts and could give UTC greater negotiating power over plane makers Boeing and Airbus.

Both firms have been pushing suppliers, including UTC, to lower their prices.

By making more aircraft components, analysts say, UTC will be in a better position to resist such pressures.

According to a joint statement, UTC chief executive Greg Hayes will remain as CEO of the combined company.

He said: “This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems.”

Rockwell chairman, president and CEO Kelly Ortberg will run a new business known as Collins Aerospace that will combine the parts businesses.

Before the deal can go ahead, it will have to gain regulatory and customer approval.

UTC makes Pratt & Whitney jet engines used by Airbus, Bombardier, Embraer and other plane makers, while Rockwell Collins is a major supplier to Boeing, Airbus among others.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

17 − 7 =