China’s regulators on Friday approved the $30 billion acquisition of aerospace manufacturer Rockwell Collins Inc. by United Technologies Corp., clearing the way for the Connecticut conglomerate to close on the deal and stake its claim as a dominant player in the aerospace industry.
In its anti-monopoly review, China’s State Administration for Market Regulation attached conditions that UTC and Rockwell Collins must divest certain assets.
Investors cheered the fall of the last regulatory hurdle, sending Rockwell Collins shares up 9.2 percent, to close at $141.63. UTC rose 2.7 percent, ending the day at $129.04.
UTC, which won approval in October from the U.S. Department of Justice, said it now expects to close on the acquisition by next week.
The Farmington-based manufacturer of jet engines, airline and aviation components, elevators and heating and cooling equipment announced the deal in September 2017.
The acquisition makes UTC a major player in aerospace. In 2012, it paid $18 billion for Goodrich Corp., a North Carolina-based aviation manufacturer that gave UTC a significant presence in the making of landing gear, brakes and other components.
With the Rockwell Collins deal, UTC is now a manufacturer of cockpit and cabin equipment and avionics that gather and interpret flight data.
The new unit, known as Collins Aerospace, will be formed by merging the Cedar Rapids, Iowa-based Rockwell Collins and UTC Aerospace Systems, UTC’s aviation parts manufacturer.
Collins Aerospace will employ nearly 20,000 engineers, David Gitlin, president of UTC Aerospace Systems, said in March.
UTC is taking advantage of a rapidly growing aerospace market as the number of passengers grows in Europe and North America and India and China develop a middle class and business community that increasingly rely on air travel.
Chinese approval did not come quickly, prompting analysts to question if the deal got caught up in disputes over tariffs, trade and international politics.
Gregory Hayes, chief executive officer of UTC, assured industry analysts that the Rockwell Collins deal was not snagged in unrelated disputes with President Donald Trump over trade and tariffs.
He initially told analysts on Sept. 14 that the deal would close by Sept. 30. On Oct. 23, Hayes said he expected it to be approved in two to six weeks.
Following the closing of the Rockwell Collins deal, UTC will turn its full attention to the makeup of its portfolio of businesses. With a major presence in aerospace, UTC is under pressure from investors to break apart its mix of businesses.
A focus on aviation is expected to deliver greater value to shareholders by jettisoning UTC’s Otis Elevator, Carrier heating and cooling and building security businesses.
One possibility is to break into three businesses: aerospace, which includes jet engine manufacturer Pratt & Whitney and Collins Aerospace; UTC Climate, Controls & Security, which includes Carrier heating and cooling equipment and building securities systems; and Otis elevator.
A decision on the future of UTC’s businesses is expected before the end of the year.