Topic: How To Invest

Wall Street Stock Forecaster Hotline – Friday, September 1, 2017

Article Excerpt

UNITED TECHNOLOGIES CORP., $117.92, New York symbol UTX, has four main businesses: Climate, Controls & Security makes heating/air conditioning systems and building alarms; Otis makes elevators; Aerospace Systems manufactures aircraft parts; and Pratt & Whitney develops and sells jet engines. According to media reports, the company is close to finalizing a friendly takeover offer for Rockwell Collins Inc. (New York symbol COL). That firm is a leading maker of airframes and other aircraft components. The acquisition would likely cost around $20 billion, or 21% of United Technologies’ $94.2 billion market cap (the total value of all outstanding shares). Big acquisitions like this add risk. Moreover, there is little overlap between the two firms, so any cost savings from the merger would be small. However, the purchase would let United Technologies sell a wider variety of critical components and maintenance services to aircraft makers such as Boeing and Airbus. The company’s bigger size would also give it more clout when negotiating new deals. Moreover, United Technologies…

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