June 19, 2024

DealBook: United Technologies Clinches $16.4 Billion Deal for Goodrich

Jonathan Alcorn/Bloomberg NewsLouis Chenevert, chairman and chief executive of United Technologies C

9:42 p.m. | Updated

United Technologies has agreed to buy the Goodrich Corporation for $16.4 billion in cash, the companies said late on Wednesday, in an effort to expand in the fast-growing commercial aviation business.

Under the terms of the agreement, United Technologies will pay $127.50 a share, a 16 percent premium to Goodrich’s Wednesday closing price. It is also a 47 percent premium to the company’s closing price on Sept. 15, before reports of a potential deal emerged.

The deal, the largest by United Technologies in recent memory, would add another major component to a business portfolio that already includes Sikorsky helicopters, Pratt Whitney jet engines and Otis elevators.

Directors of both companies met late on Wednesday to approve the deal. The deal is being supported by about $15 billion in financing from a lending group led by JPMorgan Chase and including HSBC and Bank of America Merrill Lynch.

A deal by United Technologies would be the latest by a company seeking growth through acquisitions, at a time when companies have been hard-pressed to increase their profits internally. Financing remains relatively cheap for borrowers with strong credit ratings, while many companies have been holding billions of dollars in cash on their balance sheets since the end of the financial crisis.

Shares of United Technologies have fallen nearly 1 percent since Friday, closing at $74.87.

The company has been an active deal maker over the last three years. In 2009, it purchased General Electric’s fire alarm and security systems unit for $1.8 billion.

In 2008, it began a hostile bid for Diebold, a maker of automated teller machines and security systems, that went on for months but called off its efforts after the onset of the financial crisis. Since then, it has shied away from unsolicited offers.

United Technologies was advised by JPMorgan Chase, while Goodrich was advised by Citigroup and Credit Suisse.

Article source: http://feeds.nytimes.com/click.phdo?i=dc7703e47835d173ab1c33cb6ee532df

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