WASHINGTON (CN) - Aerospace giant United Technologies Corporation can pay $30 billion to acquire Rockwell Collins, but not without divesting two of the latter's businesses, the Justice Department concluded Monday.
Filed late Monday with a federal judge in Washington, the settlement papers say UTC agreed to sell one of Rockwell’s de-icing businesses, along with another business that sells trimmable horizontal stabilizer actuators, devices that help airplanes maintain their altitude.
Without the divestiture, the Justice Department said the merger of UTC and the Delaware-based Rockwell would eliminate direct competition between two of the world's three suppliers of pneumatic de-icing systems, which use an inflatable rubber de-icing boot to remove ice from the wings of aircraft.
The government filed its challenge to the merger simultaneously with the proposed settlement and explanation of consent-decree procedures.
In a statement, the Justice Department noted that UTC and Rockwell are the industry's closest competitors for, as well as top producers of, trimmable horizontal stabilizer actuators.
The competing companies won two of the largest and most recent contracts for the devices for large Boeing and Airbus planes.
"Boeing and Airbus are the world’s largest manufacturers of passenger aircraft, and these aircraft represent two of only three THSA awards by these manufacturers in this century," the complaint says, using an abbreviation for the actuator device.
"Today’s remedy ensures that customers continue to benefit from competition in the supply of these two aircraft components that are critical to safety,” Assistant Attorney General Makan Delrahim said in a statement. "The remedy allows the divestiture buyers to compete vigorously to provide high quality systems and service to customers."
UTC and Rockwell announced their merger plans on Sept. 4, 2017. One of the largest aerospace acquisitions ever, it will allow UTC to compete with Boeing, Airbus and other airplane manufacturers.
The deal had already been approved by the European Union and Canada, with the Justice Department saying the European Commission and the Competition Bureau of Canada cooperated with the Antitrust Division closely during the course of their respective investigations.
UTC spokeswoman Michele Quintaglie said the settlement is the next step in closing the deal.
“The process for closing on Rockwell Collins is moving forward with the recent U.S. Department of Justice approval being the latest milestone,” Quintaglie said in a statement. “Once we have received all of the necessary approvals, we will announce the final closing of this transaction.”
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