The Biggest Merger in the History of Aviation

Sep 5, 2017 // By:admin // No Comment

United Technologies Corporation has agreed to buy Rockwell Collins Inc. for staggering $23 billion. Experts say that this merger will give rise to the giant aerospace behemoth that can outrun jetliners and warplanes from tip to tail very easily. This is one of the biggest deals in the history of the aviation industry.

This deal will certainly create room for an aircraft-parts giant to withstand the squeeze from the other aviation companies like Boeing Co. and Airbus SE. There is going to be huge competition especially in the area of pricing discounts and higher output once the deal is finalized.

This phase would be a transition from a company to a conglomerate that will proudly boast of the products for airplanes from Rockwell Collins’ touchscreen cockpit displays to United’s Pratt & Whitney jet engines. On one side, it seems to be a deal that will boost the company’s growth and potential to influence the world of aviation. On the other hand, it also has been a monopoly of a mammoth that can make its own rule.

There are a lot of mixed opinions coming from the experts of this industry when they talk about the merger of these two firms. Still, it would be naive to predict the future. We only have to wait to see what outcomes the company brings to the world of aviation.

As far as the market reaction is concerned, investors are reacting with caution, pushing United Technologies down to 3.6 percent, the most intraday in the last six months. This is the biggest drop in the Dow Jones Industrial Average if we consider the flipside. The shares fell to $113.67, while Rockwell Collins climbed less than 1 percent to $131.58.

United Technologies said that they are planning to cope up with the new debt that they are going to face. The staggering amount of $14billion needs proper planning and anticipation. Moody’s Investors Service has put the company’s ratings on review, says United Technologies. Moody’s presently has an A3 senior unsecured debt coordinated rating for United Technologies.

This giant deal would make its impact on the aviation industry, and that would be palpable in the upcoming years. We can’t predict what we have in few years to come. We can only wait and watch and hope for a better aviation industry

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