April 20, 2021

DealBook: Goodrich Sale for $16 Billion Is Confirmed

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

11:14 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 deal’s terms, 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 portfolio that already includes Sikorsky helicopters, Pratt Whitney jet engines and Otis elevators. The combined company is expected to have $66 billion in global sales this year.

Goodrich will be added to United Technologies’ existing aerospace division and will continue to be led by its chairman and chief executive, Marshall Larsen. United Technologies said that it expected the deal to begin adding to its earnings in the second year after closing.

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 is 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.

In 2009, the company bought 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, but called off its efforts after the financial crisis.

United Technologies was advised by JPMorgan and Goldman Sachs, while Goodrich was advised by Credit Suisse and Citigroup. United Technologies received legal advice from the law firm Wachtell, Lipton, Rosen Katz, while Goodrich was counseled by Jones Day.

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

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

DealBook: Foster’s Moves to Thwart SABMiller’s Hostile Bid

LONDON — In a bid to fend off a hostile takeover attempt by SABMiller, the Australian brewer Foster’s said on Tuesday that it would return at least $525 million to investors, potentially through a share buyback.

The news, which came as part of the company’s earnings announcement, pushed Foster’s shares to 4.99 Australian dollars, above SABMiller’s 4.90 a share offer. The move increased the possibility that SABMiller might have to raise its bid.

“Given the strength of Foster’s balance sheet, the board is also reviewing capital management options with a view to returning cash of at least 500 million to shareholders during the next 12 months,” John Pollaers, Foster’s chief executive, said in a statement.

SABMiller, one of the world’s largest brewers whose brands includes Peroni and Castle, said last week that it would take its $10 billion bid for Foster’s directly to shareholders, two months after the Foster’s board rejected the offer as too low. Some analysts said previously that SABMiller would have to raise its offer to at least 5 Australian dollars a share to succeed.

With the plan, Foster’s is looking to win the backing of its own shareholders against SABMiller’s bid. The step is likely to buy Foster’s more time to seek a higher price or take further actions to maintain its independence in an increasingly consolidated industry.

The Foster’s takeover defense strategy “has been revealed and offers few real surprises,” a group of Citigroup analysts wrote in a research note. The company said it planned to reduce costs by 55 million dollars on an annual basis before the end of 2013.

As part of its bid, SABMiller has said it would reduce its offer price by any dividend amount paid by Foster’s, which said on Tuesday that it would pay a second-half dividend of 13.25 Australian cents a share. Shares in SABMiller rose 1.6 percent in London on Tuesday in early afternoon trading.

Foster’s also said on Tuesday that it had a net loss of 89 million dollars in the 12 months that ended in June, in large part as a result of a charge of 1.2 billion dollars linked to the spinoff of its wine business. Operating profit was 817 million dollars, a result that broadly met analysts’ expectations.

Article source: http://feeds.nytimes.com/click.phdo?i=62445141ef8d93bfb729164351efb0a7