March 2017: Rockwell Collins and B/E Aerospace each said their respective shareholders had approved the companies’ merger.
Cedar Rapids, Iowa-based Rockwell Collins (which specializes in, among other areas, flight deck avionics and cabin electronics) in October 2016 announced that it would acquire airplane cabin interior product supplier B/E Aerospace for approximately $6.4 billion in cash and stock. It also agreed to take on $1.9 billion in Wellington, Florida-based B/E Aerospace’s net debt.
August 2017: If perception is reality, then avionics and cabin interiors leader Rockwell Collins (RCO) is “in play” to be acquired, with multi-industrial conglomerate United Technologies Corporation (UTC) (PRW) the 1st contender. That was the talk within industry the weekend following late-breaking news August 4 that (UTC) (PRW) was looking to buy Rockwell (RCO).
February 2018: Rockwell Collins (RCO) had $280 million net income for 1st quarter ended December 31 (vs $145 million a year ago) on +69% higher sales, or +9% organic growth excluding B/E Aerospace.
March 2018: News Item A-1: (UTC) and Boeing ink ‘win-win’ deal, clearing way for Rockwell (RCO) merger.
United Technologies (UTC), which is in the process of buying Rockwell Collins (RCO), has signed an agreement with ultra-important customer Boeing (TBC), representing a green light for (UTC)’s acquisition and consolidation of major aerospace and defense suppliers.
Rockwell Collins (RCO) said on March 9 that its shareholders had approved the issuance of common stock needed to complete the acquisition. “Our share owners demonstrated clear and overwhelming support with >90% of the votes cast at our special meeting voting in support of our acquisition of B/E Aerospace,” Rockwell Collins Chairman, President and (CEO) Kelly Ortberg said. The company added that the purchase “is expected to close later this spring upon completion of all requisite regulatory approvals and other customary closing conditions.” B/E Aerospace said 99% of votes cast at its special meeting of shareholders approved the transaction.
The merger agreement calls for each share of B/E Aerospace common stock to be canceled and automatically converted into the right to receive $34.10 in cash, without interest, and 0.3 of a share of Rockwell Collins common stock. “Based upon Rockwell Collins [stock’s] closing price of $97.65 on March 8, 2017, the total implied value for each B/E Aerospace share is $64.38,” B/E Aerospace said.
News Item A-2: "(FAI) Technik GmbH Becomes Authorized Rockwell Collins Dealer" by "China Aviation Daily" March 16, 2018.
(FAI) Technik GmbH, part of the (FAI) Aviation Group, is pleased to have signed a dealership agreement with Rockwell Collins (RCO) to become one of its accredited dealers.
Effective immediately, the agreement means (FAI) Technik can sell, install and maintain Rockwell Collins (RCO)'s avionics and cabin electronics equipment from its headquarters at Albrecht Dürer International Airport in Nuremberg, Germany.
The announcement marks a new phase in the relationship between (RCO) and the broader (FAI) Aviation Group, which began in July 2016 and formally launched on January 5, 2018.
Rockwell Collins' Regional Sales Manager for Germany, Robert White commented, "Given (FAI)'s growth since 2016, we believe we are best placed to take advantage of the upturn within business aviation. Adding (FAI) Technik to our group of dealers in Europe brings an encouraging scope to both our cabin and avionics capabilities, providing our customers with targeted aftermarket solutions being carried out by a competent and qualified dealer. "We are excited to further expand our maintenance capabilities by offering (RCO)'s industry-leading products to our customers," stated Siegfried Axtmann, Chairman & Co-Founder of the (FAI) Aviation Group.
"(FAI) Technik is growing incredibly fast," Axtmann continued. "In 2017, we inaugurated our new hangar 8 and undertook some of our most challenging maintenance projects to date. We also marked our most impressive year in terms of revenue, which increased by +40% compared to 2016."
May 2018: "(EU) Commission (EC) Approves Rockwell Collins Sale to (UTC) After Divestitures" by "Aviation Week" Michael Bruno (email@example.com), May 9, 2018.
The European Commission (EC) has cleared the way for United Technologies Corporation (UTC) to buy Rockwell Collins (RCO), assuming the divestiture of businesses in actuators, pilot controls, ice protection and oxygen systems.
The May 4 announcement (which was largely expected) removes one of the last requirements for the US aerospace companies to clear before merging their operations, expected this summer.
Rockwell Collins (RCO) is a USA-based avionics, Information Technology (IT) and aircraft interiors provider, while (UTC) is the parent company of engine manufacturer Pratt & Whitney (PRW) and (UTC) Aerospace Systems.
“(UTC) and Rockwell Collins (RCO) are 2 of the biggest suppliers of these components to aircraft makers worldwide,” Commissioner Competition Policy Margrethe Vestager said. “We need to ensure that competition is preserved for all of them. We can allow this merger to go ahead because in all the markets where we raised concerns, (UTC) has committed to divest activities covering the entire overlap between the 2 companies.”
The Commission had been concerned that the $30 billion tie-up would have reduced competition for trimmable horizontal stabilizer actuators (THSAs), throttle quadrant assemblies and rudder brake pedal systems, pneumatic wing ice protection and oxygen systems. In (THSAs), there already were limited competitors, and in oxygen masks, (RCO) was a leader, while (UTC) had planned earlier to enter the market.
To address concerns, (UTC) offered to divest (RCO)’s entire global business in ice protection, located in a single US facility, and (UTC)’s 2 research projects in oxygen systems.
Otherwise, there were no major worries. “The Commission concluded that other overlaps and vertical links between (UTC) and (RCO)'s activities did not lead to any competition concerns, mainly because of the existence of a sufficient number of alternative suppliers.”
The divestitures are being closely watched by the investment community, which has been anticipating merger and acquisition activity since (UTC) leaders this year started talking about reviewing the multi-industrial conglomerate’s business portfolio after the (RCO) acquisition closes. Besides potentially spinning off non-aerospace elements of (UTC), analysts have questioned how much of (RCO), and specifically Interiors, (UTC) would want to keep long-term since the deal was announced in September.