Airplane engine maker United Technologies Corp (UTC) has agreed to buy airplane parts maker Rockwell Collins Inc for 30 billion U.S. dollars, cementing one of the largest deals in the aerospace industry and gaining more negotiating leverage over airplane makers Boeing and Airbus.
"This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems," UTC's chairman and chief executive officer, Greg Hayes, said in a statement on Monday.
United Technologies expects to close the purchase in the third quarter of 2018. Rockwell Collins and UTC's aerospace systems segment will be combined under the name of Collins Aerospace Systems.
Farmington, Connecticut-based United Technologies makes the high-performance Pratt & Whitney jet engine for Airbus, and supplies engines for Lockheed Martin Corps's F-35 Joint Strike Fighter. Cedar Rapids, Iowa-based Rockwell Collins is a major avionics supplier to Boeing and Airbus and other plane makers.
The combined annual sales of the two companies total more than 62 billion dollars, about two thirds of the number of Boeing. The deal will also give the new company more negotiating leverage over Boeing and Airbus who have been building up their own avionics business and encroaching on profits earned by their suppliers.