Jet-engine maker United Technologies (NYSE: UTX) has agreed to buy aircraft parts manufacturer Rockwell Collins (NYSE: COL) for $30 billion, including debt
Under the deal, Rockwell shareholders will receive $140 per share in stock and cash, split between $93.33 in cash and $46.67 in United Tech stock.
The offer represents an 18% premium to Rockwell's closing share price on Aug. 3, the day before media reported that UTC was weighing a bid for Rockwell.
Under the deal, the companies said that Rockwell Collins and UTC's aerospace systems segment will be combined to create a new business unit named Collins Aerospace Systems.
"This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems," UTC CEO Greg Hayes, said in the statement.
The deal, which includes $7 billion in Rockwell's debt, is expected to save more than $500 million by the fourth year after its completion
Rockwell Collins is a leader in aviation and high-integrity solutions for commercial and military customers and is globally recognized for its leading-edge avionics, flight controls, aircraft interior and data connectivity solutions. On a 2017 pro forma basis, its estimated sales are greater than $8 billion.
Rockwell CEO Kelly Ortberg said, "We are extremely pleased to announce this compelling transaction with UTC which is a testament to the value we have created for Rockwell Collins' employees, customers and shareowners.”
United shares capsized $5.00, or 4.2%, to $112.92, while Rockwell shares progressed 88 cents to $131.49