United Technologies Corp. has announced the completion of its acquisition of Rockwell Collins and the company’s intention to separate its commercial businesses, Otis and Carrier (formerly CCS), into independent entities.
The separation will result in three global, industry-leading companies: United Technologies, comprised of Collins Aerospace Systems and Pratt & Whitney, will be the preeminent systems supplier to the aerospace and defense industry; Otis, the world’s leading manufacturer of elevators, escalators and moving walkways; and finally Carrier, a global provider of HVAC, refrigeration, building automation, fire safety and security products with leadership positions across its portfolio. In 2017 Carrier achieved sales of $17.8 billion through the company’s portfolio including industry-leading brands such as Carrier, Kidde, Edwards, Lenel S2 and Automated Logic. Carrier’s businesses enable modern life, delivering efficiency, safety, security, comfort, productivity and sustainability across a wide range of residential, commercial and industrial applications. Through accelerated innovation, the company has released more than 200 new products over the last two years.
“Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth, lead its industry in innovation and customer focus, and maximize value creation,” said United Technologies Chairman and Chief Executive Officer Gregory Hayes. “Our products make modern life possible for billions of people. I’m confident that each company will continue our proud history of performance, excellence and innovation while building an even brighter future. As standalone companies, United Technologies, Otis and Carrier will be ready to solve our customers’ biggest challenges, provide rewarding career opportunities, and contribute positively to communities around the world.”
The proposed separation is expected to be effected through spin-offs of Otis and Carrier that will be tax-free for UTC shareowners for U.S. federal income tax purposes. Each spin-off is subject to the satisfaction of customary conditions, including final approval by UTC’s Board of Directors, receipt of a tax opinion from counsel, the filing and effectiveness of a Form 10 registration statement with the U.S. Securities and Exchange Commission and satisfactory completion of financing.
Gregory Hayes will oversee the transition and will continue in his current role as UTC Chairman and CEO following the separation. The three independent companies will be appropriately capitalised with the financial flexibility to take advantage of future growth opportunities. The separation is expected to be completed in 2020, with separation activities occurring within the next 18-24 months.