United Technologies Corp (UTC), the $54-billion aerospace and defence contractor and maker of the UH-60 Black Hawk helicopter, today received the European Union conditional approval for its $16.5 billion proposed acquisition of aircraft components maker Goodrich Corp.
Brussels-based The European Commission (EC), the antitrust regulator for the 27-member European Union, said in a statement that the Connecticut-based company will have to sell Goodrich's electrical power generation and controls for small engines business.
In June, China also approved the merger on condition that UTC divests Goodrich's electrical power generation and transmission systems businesses and 60 per cent of Aerolec, a joint venture with Thales Avionics in the next six months.
Surprisingly, the EC said the approval is also on condition that UTC grants Rolls-Royce an option to acquire Goodrich's lean burn fuel nozzle research and development project.
The EC said that it had concerns that the transaction would have left the merged entity without a sufficient competitive constraint on the market for power generation. It also had concerns that some competing engine suppliers, which depend on Goodrich for certain components such as fuel nozzles and engine controls, could be shut out from access to these components as a result of the merger.
The EC indicated that the terms have been agreed by UTC. The regulator said that the agreed conditions addressed its concerns that the merged group would otherwise have had too much clout in the relevant markets.