Business

Regulators ask Collins Aerospace to divest military GPS business in Cedar Rapids

Employees “who might be affected” by the divestiture of its military GPS business by UTC will be notified this week, says Phil Jasper, Mission Systems head at Collins Aerospace. (Liz Martin/The Gazette)
Employees “who might be affected” by the divestiture of its military GPS business by UTC will be notified this week, says Phil Jasper, Mission Systems head at Collins Aerospace. (Liz Martin/The Gazette)

CEDAR RAPIDS — Antitrust regulators with the U.S. Department of Justice reviewing the proposed merger of United Technologies and Raytheon have requested that Collins Aerospace divest its military GPS business, which employs hundreds in Cedar Rapids.

In a Monday email, viewed by The Gazette, Collins Aerospace employees were notified regulatory agencies asked the company to “explore the divestiture” of the legacy Rockwell Collins operation “to satisfy certain competitive concerns.”

Phil Jasper, head of Collins Aerospace’s Mission Systems business unit, said in the email the company has not yet determined a buyer or timing for a transaction.

Employees “who might be affected” will be notified this week, Jasper said, continuing, “We know that this news brings with it a lot of uncertainty, but I ask that you not let this distract us from meeting our commitments and supporting our customer and their mission.”

In an emailed statement Monday, Collins Aerospace spokeswoman Pam Tvrdy-Cleary confirmed that “as part of the proposed United Technologies and Raytheon merger regulatory process, Collins Aerospace Systems is exploring the divestiture of its military GPS business.”

“We are engaging with our employees and customers to ensure they are fully informed while we work through this process,” she said.

Tvrdy-Cleary could not immediately provide a specific number of employees currently with that business.

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Raytheon’s website describes its own GPS and Navigation Systems business as an “industry leader in military GPS solutions,” including avionics equipment, high anti-jam systems, integrated GPS navigators and anti-spoofing modules.

The Waltham, Mass., company and United Technologies on June 9 announced their agreement to form Raytheon Technologies Corp. in an all-stock merger of equals. Both companies’ shareholders voted Oct. 11 to approve the $135 billion deal, which is expected to close by the first half of 2020.

In a June investors call, United Technologies Chief Executive Officer Greg Hayes said the merger would be “integration-light,” outside of the company’s corporate office and seeing “how we can take that capability (at Mission Systems) and then spread it across some of the Raytheon complementary businesses.”

United Technologies had $134 million in cash inflows related to business dispositions during the first three quarters of 2019, the company reported last week in a financial filing with the U.S. Securities and Exchange Commission.

These largely were Rockwell Collins businesses the company was required to divest before United Technologies could receive regulatory approval to acquire it, the filing shows.

Comments: (319) 398-8366; thomas.friestad@thegazette.com

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