US aircraft parts supplier United Technologies has agreed to buy rival Rockwell Collins for US$30 billion, in one of the aviation industry’s largest ever deals.

United Technologies, which owns aircraft systems and components producer UTC Aerospace Systems and engine manufacturer Pratt & Whitney, confirmed on 4 September its plans to buy Rockwell Collins.

Skadden corporate partners Charles Mulaney and Richard Witzel are leading on the deal for Rockwell Collins, with competition partners Clifford Aronson and Frederic Depoortere in New York and Brussels advising on merger control. United Technologies has instructed Wachtell Lipton Rosen & Katz as lead counsel, with Crowell & Moring providing antitrust advice.  

Skadden previously advised Rockwell Collins on its US$8.6 billion acquisition of B/E Aerospace, which closed in April.

The deal remains subject to regulatory approvals and must still be cleared by Rockwell Collins’ shareholders, but it is expected to close in the second half of 2018.

It is not yet clear which jurisdictions will likely require merger control approval, but United Technologies chairman and chief executive Greg Hayes said he expects the merger to be a success.

“We have demonstrated we can successfully integrate large acquisitions into our business and I have full confidence that the team has the capability to do it again,” Hayes said. In 2011, United Technologies bought Goodrich Corp, a manufacturer of aeroplane wheels and brakes, for US$18.4 billion.

The newly merged entity will be named Collins Aerospace Systems, with Rockwell Collins’ chief executive Kelly Ortberg retaining her existing role at the merged company.

Ortberg said the tie-up will allow Collins Aerospace Systems to compete more effectively for future business within the air parts market, potentially strengthening its negotiating position with Boeing and Airbus, which have looked to squeeze costs and buy from alternative suppliers.  

Both aeroplane manufacturers raised doubts about the deal, following its announcement.

“Until we receive more details, we are sceptical that it would be in the best interest of – or add value to – our customers and industry,” a Boeing spokesperson told Bloomberg. “Should we determine that this deal is inconsistent with those interests, we would intend to exercise our contractual rights and pursue the appropriate regulatory options to protect our interests.”

An Airbus spokesperson expressed concern that the deal might affect already delayed deliveries of Pratt & Whitney engines to the French aeroplane manufacturer.

“Our total focus is on delivering planes, and we hope that this M&A would not distract UTC from their top operational priority,” Airbus told Bloomberg.

Counsel to United Technologies

Wachtell Lipton Rosen & Katz

Crowell & Moring

Partners WM Randolph Smith and Shawn R Johnson in Washington, DC, assisted by counsel Megan L Wolf

Counsel to Rockwell Collins

Skadden Arps Slate Meagher & Flom

Partners Charles Mulaney, Richard Witzel and Seth Jacobson in Chicago, Clifford Aronson and Regina Olshan in New York, and Frederic Depoortere in Brussels