Industrial conglomerate United Technologies puts $23 billion on the table for the acquisition of the aircraft manufacturer Rockwell Collins. It is one of the largest takeover numbers ever in the aviation sector.
Including debt is an amount of $30 billion with the deal. The transaction is handled in shares and cash. United Tech is a maker of, among others, Pratt & Whitney aircraft engines, while Rockwell Collins is engaged in, for example, cockpit equipment and aircraft cabinets.
By joining together, the combined group can, among other things, execute better prices with aircraft builders like Boeing and Airbus, to save costs and strengthen its market position. The transaction must be completed in the third quarter of 2018.
There were rumors that round United Tech’s interest in Rockwell Collins. Recently, there have been more mergers between suppliers to the aviation industry. For example, Dutch Fokker Technologies was incorporated by its British branch engineer GKN Aerospace two years ago.
United Tech will merge its aviation activities with Rockwell Collins in a new part, called Collins Aerospace Systems. United Tech is also the parent company of the manufacturer of lifts Otis and the manufacturer of air conditioner Carrier.
“From UTX’s standpoint, we do not think it is a coincidence that reports of this deal emerged just as the share price was nearing its highest levels since early-mid 2015, which was the last time when we think the company was seriously contemplating other large acquisition activity,” Credit Suisse analyst Julian Mitchell wrote on Thursday.
Swiss pharmaceutical giant Novartis gets a new chief. Vasant Narasimhan becomes the successor to Joseph Jimenez who leaves at the end of January. Narasimhan is currently the head of the division that deals with drug development. He has been working at Novartis since 2005.
The company is currently investing in the development of new medicines, as the company is currently in competition with cheap counterfeit medicines. This includes, among other things, the company’s sales under pressure. Jimenez said that in July, the company expects the company to recover its revenue next year.
Furthermore, the drug maker is still looking at the strategic options for its emerging market for eye care products, Alcon. This item may be brought to the stock market.