Business

China approves UTC-Rockwell Collins deal, clearing last regulatory hurdle

Deal expected to close early next week

Building 124 on the Rockwell Collins headquarters campus is seen in Cedar Rapids on Wednesday, Jan. 10, 2018. (Rebecca F. Miller/The Gazette)
Building 124 on the Rockwell Collins headquarters campus is seen in Cedar Rapids on Wednesday, Jan. 10, 2018. (Rebecca F. Miller/The Gazette)

CEDAR RAPIDS — Chinese antitrust regulators have approved United Technologies Corp.’s acquisition of Rockwell Collins, giving the two companies the green light to close the deal as soon as early next week.

In a statement Friday morning, the Farmington, Conn.-based aerospace company said it plans to close the $30 billion deal for Cedar Rapids’ largest employer within three business days.

Rockwell Collins stock jumped on the news, gaining 9.2 percent to close at $141.60 at the end of trading Friday in New York, while UTC’s stock price rose 2.6 percent to close the day at $128.99.

Markets closed at noon central time Friday in observance of Thanksgiving.

The Chinese government was the last authority UTC and Rockwell needed to approve the deal, following approvals from the U.S. Department of Justice in October, and from the European Union and Boeing earlier this spring.

As conditions for its approval, China is requiring Rockwell and UTC to divest its businesses producing flight stabilizers and wing de-icers, and end research and development in oxygen supply systems, according to a translated filing from China’s State Administration for Market Regulation.

Officials at the Justice Department also required UTC and Rockwell sell those systems when it gave its approval in October. Safran S.A., a French aerospace company, previously agreed to buy Rockwell’s stabilizer business earlier this year.

UTC and Rockwell first announced plans for the deal in September 2017.

There was some speculation earlier in the fall that China would hold up or reject the deal as a bargaining chip in the ongoing trade war with the U.S., citing a failed bid from American chipmaker Qualcomm to buy Dutch company NXP Semiconductors earlier this July. Qualcomm pulled its bid, citing China’s slow action on the deal, which would have been the largest ever in the semiconductor industry, drawing criticism from U.S. Treasury Secretary Steve Mnuchin at the time.

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Further questions about what is expected at Rockwell Collins’ locations in Cedar Rapids and the greater Eastern Iowa region were referred to UTC, which declined further comment.

Rockwell employs 9,000 people between its plants in Decorah, Manchester, Bellevue and Coralville.

l Comments: (319) 398-8366; dan.mika@thegazette.com

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