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UTC makes bid to buy Rockwell CollinsUTC makes bid to buy Rockwell Collins

A $30 billion purchase of Rockwell Collins by United Technologies Corp. drew skeptical reactions from some customers, investors, and analysts after it was announced Sept. 4. Rockwell Collins, maker of Pro Line Fusion avionics suites and other general aviation products, would join Pratt & Whitney in the UTC family, in one of the biggest aerospace business deals ever.

Textron's Beechcraft Special Missions King Air 350ER with the Rockwell Collins Pro Line 21 avionics package. Photo by Mike Fizer.

Founded in 1933 by Arthur Collins in Cedar Rapids, Iowa, Collins Radio Company manufactured the radio Neil Armstrong used to announce his footsteps on the moon. The company was purchased in 1973 by Rockwell International, and various mergers, acquisitions, and corporate structure changes have followed in the years since. Rockwell Collins announced the latest, and largest, of these deals, its pending purchase by the Connecticut-based industrial giant United Technologies, noting that more than $500 million in “cost synergies” would eventually result.

United Technologies stock promptly dipped 6 percent on Sept. 5, and some customers—including Boeing and Airbus—expressed skepticism and concern as to whether the deal will bring benefits, and analysts speculated that the deal is a prelude to another spinoff by United Technologies.

Many questions remain unanswered, including the potential impact on jobs, or the potential location (or relocation) of Rockwell Collins operations in Iowa. The company has a current workforce of 30,000 worldwide, The Gazette, of Cedar Rapids, noted Sept. 6, a figure that includes 8,000 Rockwell Collins headquarters staff in Cedar Rapids. The acquisition is expected to result in layoffs, but executives told The Gazette that job cuts would primarily affect management, not manufacturing, design, or engineering staff.

Rockwell shareholders are expected to vote on the deal in February, and regulatory approval is expected given the limited overlap between the business lines of the two firms. The deal is expected to close by the end of September 2018.

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