UTC completes acquisition of Rockwell Collins
United Technologies Corp. (UTC) has announced the completion of its acquisition of Rockwell Collins and the company's intention to separate its commercial businesses, Otis and Carrier (formerly CCS), into independent entities, whilst creating an aerospace industry systems supplier called Collins Aerospace Systems.
The separation will result in three global companies: United Technologies, comprised of Collins Aerospace Systems and Pratt & Whitney, will supply systems to the aerospace and defence sectors; Collins Aerospace was formed through the combination of UTC Aerospace Systems and Rockwell Collins; Otis, manufacturer of elevators, escalators and moving walkways; and Carrier, a global provider of HVAC, refrigeration, building automation, fire safety and security products with leadership positions across its portfolio.
"Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth, lead its industry in innovation and customer focus, and maximise value creation," said United Technologies Chairman and Chief Executive Officer Gregory Hayes. "Our products make modern life possible for billions of people. I'm confident that each company will continue our proud history of performance, excellence and innovation while building an even brighter future. As standalone companies, United Technologies, Otis and Carrier will be ready to solve our customers' biggest challenges, provide rewarding career opportunities, and contribute positively to communities around the world."
United Technologies (UTC): United Technologies , comprising Collins Aerospace and Pratt & Whitney, will be the preeminent systems supplier to the high-growth commercial aerospace and defence industry, with a unique portfolio of technologies and scale to invest through economic cycles. Combined sales of the two businesses totaled $39.0 billion in 2017 on a pro forma basis. Collins Aerospace supplies electrical, mechanical and software solutions across all major segments of the aerospace industry and serves commercial and military customers. Pratt & Whitney is a global leader in aircraft propulsion with a growing number of engine programs including the revolutionary Geared Turbofan commercial engine and the F135 military engine for the F-35 Joint Strike Fighter programme.
Otis Elevator Company (Otis): Otis Elevator Company is the manufacturer of people-moving products, including elevators, escalators and moving walkways, with significant recurring revenue from long-term maintenance contracts and $12.3 billion in 2017 sales. Founded 165 years ago, Otis has a history of global leadership with products and services offered in nearly every country in the world. Otis, with more than two million elevators under maintenance, has the largest aftermarket service portfolio of any elevator manufacturer. Recent investments include digitally-enabled field service capabilities, positioning Otis for continued growth.
Carrier: Carrier is a global provider of innovative HVAC, refrigeration, fire, security and building automation technologies with 2017 sales of $17.8 billion. Supported by the iconic Carrier name, the company's portfolio includes industry-leading brands such as Carrier, Kidde, Edwards, LenelS2 and Automated Logic. Carrier's businesses enable modern life, delivering efficiency, safety, security, comfort, productivity and sustainability across a wide range of residential, commercial and industrial applications. Through accelerated innovation, the company has released more than 200 new products over the last two years.
The proposed separation is expected to be effected through spin-offs of Otis and Carrier that will be tax-free for UTC shareowners for US federal income tax purposes. Each spin-off is subject to the satisfaction of customary conditions, including final approval by UTC's Board of Directors, receipt of a tax opinion from counsel, the filing and effectiveness of a Form 10 registration statement with the US Securities and Exchange Commission and satisfactory completion of financing.
Gregory Hayes will oversee the transition and will continue in his current role as UTC Chairman and CEO following the separation.
UTC's acquisition of Rockwell Collins is one of the largest in aerospace history. It brings together Rockwell Collins and UTC Aerospace Systems to create Collins Aerospace Systems, an industry leader with a global presence of 70,000 employees in 300 sites and $23 billion in annual sales on a 2017 pro forma basis.
"Collins Aerospace brings together two great companies with unmatched expertise in developing electrical, mechanical and software solutions," said Hayes. "We will have a laser focus on developing innovative solutions for customers and generating strong returns for shareowners."