UTC Given New Requirements to Complete Rockwell Collins Acquisition

United Technologies Corp. will be required to divest Rockwell Collins’ pneumatic ice protection systems and trimmable horizontal stabilizer actuators (THSAs) businesses to complete its $30 billion acquisition of the avionics maker.

The pending acquisition was approved by the U.S. Department of Justice (DOJ) Monday, provided these two divestitures are made. According to DOJ, UTC and Rockwell Collins are two of the world’s three suppliers of pneumatic ice protection systems for fixed-wing aircraft.

Both companies also lead the world in supplying trimmable horizontal stabilizer actuators for commercial airplanes. The stronghold over these two markets led to DOJ filing a complaint that requires the two divestitures to occur before the acquisition is completed.

Pneumatic ice protection systems remove ice from the wing of an aircraft by means of an inflatable rubber de-icing boot. THSAs ensure that an aircraft maintains altitude during flight by adjusting the angle of the horizontal tail surface.

“Today’s remedy ensures that customers continue to benefit from competition in the supply of these two aircraft components that are critical to safety,” said Assistant Attorney General Makan Delrahim of DOJ’s Antitrust Division, which worked closely with the European Commission and Competition Bureau of Canada on the investigation.

DOJ’s decision is the “latest milestone” toward completion of the acquisition, a UTC spokesperson said in a prepared statement.

“The process for closing on Rockwell Collins is moving forward with the recent U.S. Department of Justice approval being the latest milestone. Once we have received all of the necessary approvals, we will announce the final closing of this transaction,” the statement read.

Under UTC’s acquisition, Rockwell Collins will become a combined business unit with UTC Aerospace Systems called Collins Aerospace Systems. Rockwell Collins CEO Kelly Ortberg will lead the combined Collins Aerospace business and UTAS President Dave Gitlin will become its COO.

UTC CEO Greg Hayes told analysts attending the recent Morgan Stanley Laguna Conference that the acquisition was taking longer than expected. Once completed, it will become the biggest acquisition ever completed in the history of the aerospace and defense manufacturing industry.

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