Talk is in air of big aerospace deal

Jet-engine manufacturer United Technologies is weighing an acquisition of aviation equipment supplier Rockwell Collins, according to people familiar with the matter, in a deal that would potentially rank among the largest in the aerospace industry.

Jet-engine manufacturer United Technologies is weighing an acquisition of aviation equipment supplier Rockwell Collins, according to people familiar with the matter, in a deal that would potentially rank among the largest so far in the aerospace industry.

Rockwell Collins has a market value of $19.3bn, raising the prospect that a transaction would top United Technologies’ own $18bn purchase of Goodrich in 2012.

Warren Buffett’s Berkshire Hathaway completed the biggest aerospace deal in 2016, when it bought Precision Castparts for $37bn.

Representatives of United Technologies and Rockwell Collins declined to comment.

There was no certainty the deliberations would lead to a transaction, the people said, asking not to be identified because the details were not public. It was unclear whether the companies were in talks, the people said.

A deal would give the aerospace manufacturers greater heft as Boeing and Airbus squeeze suppliers for price reductions amid a planned production increase of narrowbody jetliners. While United Technologies makes a variety of aircraft parts, Rockwell Collins specialises in products that would complement its line-up: avionics and aircraft interiors.

“They would be investing in two of the real interesting and hot areas in aircraft today,” said Kevin Michaels, a consultant.

“It completes the portfolio and there is very little overlap.”

Shares in Rockwell Collins rose to a record $119 at the close of trading on Friday in New York, before news of the potential deal. The shares climbed as much as 12% more in late trading. United Technologies, with a market value of $97bn, was little changed.