United Technologies buying Goodrich in $18.5B deal

By Alex Veiga, Associated Press

LOS ANGELES – Industrial conglomerate United Technologies is buying aerospace manufacturer Goodrich in a deal valued at $18.4 billion, including the assumption of $1.9 billion in debt.

The deal had been rumored for days, sending Goodrich's shares (GR) soaring. The stock was up more than 11% to $122 in aftermarket trading after word of the deal broke late Wednesday.

United Technologies (UTX) said it will pay $127.50 a share in cash for Goodrich, which is based in Charlotte, N.C., and has 27,000 employees.

The total deal value amounts to a 16% premium over Goodrich's closing stock price Wednesday of $109.49. It's a 47% premium above the stock's price last Thursday, before word of a pending deal leaked.

Hartford, Conn.-based United Technologies said it expects to finance the deal through a combination of debt and by issuing stock. The equity component of the deal is expected to be about 25% of the transaction, the company said.

United Technologies owns Carrier heating and cooling, Otis elevator, jet engine manufacturer Pratt & Whitney and other businesses.

It said it anticipates that the combined companies will have annual sales of about $66 billion, as United Technologies strengthens its position in the aerospace and defense industries when it takes on Goodrich.

United Technology is forecasting 2011 revenue of $58 billion. Goodrich is expected to have 2011 revenue of around $8 billion.

"Goodrich delivers on all of our acquisition criteria," said Louis Chenevert, United Technologies' chairman and CEO.

Under terms of the deal, United Technologies is forming an aerospace business unit that will be based in Charlotte and led by Goodrich Chairman, President and CEO Marshall Larsen.

In a statement, Larsen said the deal delivers immediate cash value to Goodrich's shareholders at a premium that reflects the strength of its business.

Goodrich shares gained $12.51, or 11.4%, to $122 in aftermarket trading. They slipped $2.33, or 2.1%, during the regular trading session.

United Technologies' shares fell 87 cents to $74 in aftermarket trading. The stock slipped $1.14 to end the regular session at $74.87.

http://www.usatoday.com/money/industrie ... 50508652/1