Reports of Rockwell Collins acquisition continue

Rockwell did not comment Tuesday morning

Rockwell Collins headquarters in Cedar Rapids on Thursday, Dec. 1, 2016. (Liz Martin/The Gazette)
Rockwell Collins headquarters in Cedar Rapids on Thursday, Dec. 1, 2016. (Liz Martin/The Gazette)

Reports continue to swirl that Cedar Rapids’ largest corporate employer may be in acquisition talks.

The Wall Street Journal reported Tuesday morning that Rockwell Collins and United Technologies Corp., its potential acquirer, are closer to a deal under which United would buy Rockwell for more than $20 billion. The Journal cited people “familiar with the situation” and noted the talks do not mean a deal is final.

A spokeswoman for Rockwell Collins said Tuesday morning the company had no comment on the Journal’s report.

The deal would allow United Technologies to expand the products in its aerospace business, increasing its pricing power, said Yiming Qian, an associate professor of finance at the University of Iowa who studies acquisitions, in an email.

While Rockwell makes aviation communication technology, displays, and cabin interior products, a division of United makes aircraft engines and propulsion equipment.

Qian said the deal would likely receive federal approval, even though the two companies make aerospace technology. The two companies, she said, have little product overlap and don’t sell directly to retail consumers. Big clients, such as Boeing, may disapprove of the acquisition, she said.

Qian also said that while acquisitions often lead to layoffs, it could be less likely with this deal given the small product overlap between Rockwell and United Technologies.

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Rockwell has about 30,000 employees globally, including about 8,000 people in Cedar Rapids and another 1,350 in Coralville, Bellevue, Decorah and Manchester.

Reuters and Bloomberg News reported earlier this month that Connecticut-based United technologies had started discussions to buy Rockwell. The reports come just months after Cedar Rapids-based Rockwell completed a $6.4 billion acquisition of Florida-based B/E Aerospace.

Shares of both Rockwell and United Technologies closed up more than 2 percent each Tuesday.

l Comments: (319) 398-8366; matthew.patane@thegazette.com

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