United Technologies Corp. is now anticipating Chinese approval for its purchase of Cedar Rapids-based Rockwell Collins within the next two to six weeks.
UTC Chief Executive Officer Greg Hayes told analysts during the company’s quarterly earnings call Tuesday morning that approval from the U.S. Department of Justice, which was given Oct. 1, came weeks later than expected.
The Farmington, Conn.-based company is in the final stretch of its efforts to purchase Rockwell, Cedar Rapids’ largest employer, for $23 billion, The deal would have UTC acquire Rockwell for $23 billion, not including the assumption of $7 billion in Rockwell debt.
China’s Ministry of Commerce is reviewing the deal for antitrust issues and is the last entity that has sway over the deal’s fate.
There has been speculation from market observers that China might delay or deny approval to the UTC-Rockwell deal, along with other active merger bids involving U.S. companies, as a bargaining chip in the ongoing trade disputes between it and the U.S.
Hayes said UTC is unlikely to be caught up in those issues, citing the size of the company’s footprint in the Chinese aerospace industry.
“We know people are excited, there’s a lot going on geopolitically, a lot of tension between the U.S. and China, but we just don’t see that impacting the deal,” he said.
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Responding to an analyst question, Hayes said the company is not aware of any other business divestitures or demands Beijing would ask for in exchange for its blessing.
“I don’t ever want to say anything is perfunctory because you never know, but there has been no additional discussions, no additional requests, this is simply the administrative process that (Chinese antitrust regulators) have to go through,” he said.
UTC is weighing a breakup of the company’s individual businesses focusing on elevators, aircraft engines, aerospace systems and plane interiors into separate businesses.
Hayes said any decisions on how UTC might divide its portfolio is contingent on closing the Rockwell acquisition.
Already announced plans include the missions systems and avionics divisions remaining in Cedar Rapids.
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