United Technologies offers to acquire Rockwell Collins Inc: reports

Engineering giant United Technologies Corp, the US maker of Otis Elevators and Carrier air conditioners, has submitted an offer to acquire aircraft component manufacturer Rockwell Collins Inc, a person familiar with the matter said on Friday, Reuters reported.

With the acquisition, Rockwell Collins, which has a market capitalisation of $19.3 billion, United Technologies will be able to strengthen its aerospace group. This will give it the option of separating itself from the company's other industrial units.

The source added that Rockwell Collins was working with an investment bank to review United Technologies' offer, and it was not certain whether it would decide to engage in any further negotiations with United Technologies, the source said.

The source requested anonymity as the matter was confidential.

Bloomberg News reported earlier yesterday that United Technologies was considering a potential acquisition of Rockwell Collins, but added, it was not clear whether the two companies were currently in talks.

According to commentators, the move by the two large aerospace suppliers would combine Rockwell's commercial and military aircraft avionics business with United Technologies' broad portfolio that included aircraft engines, structures, cockpit and cabin controls, ventilation systems and other electronic and mechanical devices used in aviation.

The company's Pratt & Whitney engine unit has experienced production problems with its new Geared Turbofan engine, which delayed the new Airbus A320neo aircraft.

According to commentators, a deal would give the aerospace manufacturers greater leverage as Boeing Co and Airbus SE squeeze suppliers for price reduction with planned production increase of narrow-body jetliners.

While United Technologies manufactures of aircraft parts, Rockwell Collins makes products that would complement its lineup: avionics and aircraft interiors.

''They would be investing in two of the real interesting and hot areas in aircraft today,'' said Kevin Michaels, an aerospace consultant, Bloomberg reported. ''It completes the portfolio and there's very little overlap.''