The Department of Justice on Monday evening approved United Technologies Corp.’s [UTX] pending $30 billion acquisition of Rockwell Collins [COL], although the government requires UTC to divest two Rockwell Collins’ business units to preserve competition in the marketplace.
The government said that UTX must divest the pneumatic ice protection systems and trimmable horizontal stabilizer business units to resolve competitive concerns. A complaint filed on Oct. 1 by the Justice Department said that UTC and Rockwell Collins are two of three suppliers worldwide for pneumatic ice protection systems for fixed-wing aircraft and are two of the leading suppliers globally for trimmable horizontal stabilizer actuators (THSAs) for large aircraft.
“Today’s remedy ensures that customers continue to benefit from competition in the supply of these two aircraft components that are critical to safety,” Makan Delrahim, assistant attorney general of the Antitrust Division, said in a statement. “The remedy allows the divestiture buyers to compete vigorously to provide high quality systems and service to customers.”
The Justice Department said that UTC must either divest the THSA business to France’s Safran, or an alternative acquirer approved by the U.S. A deal for the ice protection business must also be approved by the U.S., the department said.
UTC announced the deal for Rockwell Collins in September 2017 and said it expected to complete the transaction in nine months to a year. Deal terms include a combination of cash and stock for the purchase, plus the assumption of about $7 billion in debt.
Antitrust regulators in Europe and Canada cooperated with the Justice Department throughout their separate investigations. The Competition Bureau of Canada on Monday also said it wouldn’t oppose the acquisition and the European Union has also blessed the deal. Chinese authorities must still approve the acquisition.
UTC hasn’t updated when it thinks the acquisition will close.
“The process for closing on Rockwell Collins is moving forward with the recent U.S. Department of Justice approval being the latest milestone,” UTC said in a statement. “Once we have received all of the necessary approvals, we will announce the final closing of this transaction.”
Once the deal is completed, UTC will combine its Aerospace Systems segment with Rockwell Collins to create a $23 billion aerospace and defense business that generates about 75 percent of its revenue from commercial customers and the rest from defense.