United Technologies and Rockwell Collins have been engaged in talks but there is no certainty that it will lead to a deal, sources told Bloomberg.
It was unclear whether the two remain engaged in discussions.
Both companies declined to comment on reports.
A potential merger could mark one of the largest ever in the aerospace industry, bringing together the biggest and fourth biggest aircraft parts manufacturers.
United Technologies has a market capitalisation of US$97bn while Rockwell Collins has a market value of US$19.3bn.
At the group's second quarter earnings last month, United Technologies chief executive, Greg Hayes said the company has put aside money for mergers and acquisitions.
“We continue to have a place holder at $1bn to $2bn for M&A this year,” he said, “but as I said before, we will be opportunistic for the right deal.”
Rockwell specialises in avionics and aircraft interiors, products that would complement United Technologies’ variety of aircraft parts.
A deal would strengthen the two companies’ position as Boeing Co. (NYSE:BA) and Airbus SE put pressure on suppliers of aircraft components for price reductions amid the ramp up of production for narrow-body jetliners.