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United Technologies said to be eying possible takeover of Rockwell Collins

A possible merger of United Technologies and Rockwell Collins would mark one of the largest ever in aerospace industry.

United Technologies
United Technologies as put aside money for mergers and acquisitions

Aviation-parts supplier Rockwell Collins Inc. (NYSE:COL) has reportedly been approached by US industrial firm United Technologies Corp. (NYSE:UTX) about a possible takeover bid.

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.

Last year Warren Buffett’s Berkshire Hathaway Inc. completed the largest aerospace deal with the acquisition of Precision Castparts Corp. for US$37bn.

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.

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NYSE:UTX
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Market Cap: $127.05 billion
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