Rockwell Collins, Inc. (COL) Stock Pops on United Technologies Bid

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Rockwell Collins, Inc. (NYSE:COL) may be the subject of a takeover bid from United Technologies Corporation (NYSE:UTX).

Rockwell Collins, Inc. (COL)

It’s no secret that the avionics and information technology services provider has been considering selling itself, and the company is roughly valued at $19 billion. The move would help Rockwell Collins’ CEO Greg Hayes return $22 billion to shareholders in dividends and buybacks.

The move makes sense from a financial standpoint as the company’s stock has surged 28% in 2017, increasing its value. The deal would create no overlap between the two companies as Rockwell Collins , analysts believe.

The logic of the ability to serve (manufacturers) nose to tail sounds good on paper, but as a practical matter the business doesn’t naturally operate that way, especially on large air transport,” Jeff Sprague and Rob Stallard, analysts at Vertical Research Partners, wrote in a note.

The chance of such a deal coming to fruition is slim because of the fact that UTC set aside a $2 billion placeholder for potential acquisitions for the rest of the year, and any merger would be about $1 billion or half of that, while buying Rockwell Collins would require far more.

Such a move would add $40 billion in revenue to UTC, as well as considerable growth opportunities in the aviation industry.

COL stock grew 3.7% Monday, while UTX shares surged 1.8%.


Article printed from InvestorPlace Media, https://investorplace.com/2017/08/rockwell-collins-inc-col-united/.

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