Defence contractor United Technologies Corp (UTC), which makes equipment for the aerospace industry and the military, is in talks to acquire its rival Goodrich Corp, CNBC reported, citing sources close to the situation.

The news sent Goodrich stock up by 21 per cent to $112 in after-market trading, taking its market value to $10.6 billion.

Hartford, Connecticut-based UTC could buy Goodrich in a deal valued at $110 to $125 per share or $11 billion, and the deal could be announced as early as next week, the news channel said.

Founded in 1870 in Akron, Ohio as BF Goodrich by Dr Benjamin Franklin Goodrich, the company was one of the world's leading tyre manufacturers until it sold its tyre business in 1988 to Michelin of France, focussing instead on the aerospace industry, in which it had expanded in the 1980s.

It moved its headquarters to Charlotte and changed its name to Goodrich Corp in 2001. In 2002 it spun off its industrial businesses EnPro Industries and acquired TRW Aeronautical Systems.

Goodrich is now a global supplier of systems and services to aircraft and engine manufacturers, airlines and defense forces around the world. Its products, such as aerostructures and actuation systems, landing gear, engine control systems, sensors and safety systems, are on almost every aircraft.

Its key customers are large commercial, regional and business aircraft, helicopters, defense and space, original equipment and aftermarket.

Year over year, Goodrich has seen its bottom line shrink from $597 million to $579 million despite an increase in revenues from $6.7 billion to $7 billion. Marshall Larsen, the CEO of Goodrich told shareholders in July that the company expects revenue to jump by over $1 billion to $8.1 billion for 2011, compared to an earlier estimate of $7.8 billion.

UTC, which reported net income of $4.711 billion last year on revenues of $54.3 billion, is a US multinational conglomerate that manufactures high-technology products in many areas, including aircraft engines, helicopters, HVAC, fuel cells, elevators and escalators, fire and security, building systems, and industrial products, among others.

UTC is also a large military contractor, producing missile systems and military helicopters, including the UH-60 Black Hawk helicopter.

It's aerospace businesses include Hamilton Sundstrand aerospace electric systems, Sikorsky Aircraft, its helicopter making unit and Pratt & Whitney, the jet engines unit.

UTC, which has a market capitalisation of $67 billion and $5.4 billion in cash as of 30 June, had recently elevated its fire and security head William Brown to lead acquisitions and growth, who had made more than 40 acquisitions, while heading Goodrich fire and security.

If UTC succeeds, the Goodrich deal would be its largest acquisition since 2000 after it tried to buy Honeywell International only to be outbid by General Electric. GE's $45-billion deal was later rejected by the European Union. UTC, however, did not make a second attempt.