Shares of airline companies Goodrich Corp. on Thursday fell short of $ 127.50 by buying the stock prices offered by United Technologies Corp.., as investors worried that the European antitrust regulators will nix the deal.
U.S. regulators reject bid $ 42000000000 by General Electric Co. GE -2.80% buy HON Honeywell International Inc. -5.71% in 2001. The deal would have combined the world's largest maker of jet engines with one of the largest suppliers of cockpit equipment.
United technologies goodrich, But the tie-ups UTC Goodrich another, according to Nicholas Heymann, an analyst with William Blair & Co.
Honeywell will provide GE's dominance of the two most highly valued product in the plane, and the Europeans feared that GE could then be leveraged into additional sales for the cabin or electrical equipment.
Goodrich will only expand in UTC spacious suite components, including landing gear, braking and lighting systems. "While the antitrust [concerns] of course right, it is quite complementary merger minimizes risk was shot down," says Heymann.
"Some" antitrust resistance is expected for the deal, which is expected to close either the second or third quarter next year, executives from the UTC said in a call with analysts. Merger should add to earnings in the second year.
GR Goodrich shares jumped 11% 10.23% at last check for $ 120.40, after rising sharply the previous session after said merger negotiations leaked to the press.
-8.17% UTX UTC, part of the Dow Jones Industrial Average, saw its shares slipped nearly 4% to $ 72.
UTC announced Wednesday night were bought for $ 16500000000 Goodrich to increase its exposure to the rapidly evolving world of commercial aircraft fleet. On a per-share, the price offered is a premium of 51% for the six month average trading company $ 84.50.
"Goodrich is a big business with a solid product portfolio and significant aftermarket sales that complements the existing UTC aerospace presence," said Chairman and Chief Executive Louis Chenevert said in a statement Wednesday night.
UTC said it will assume net debt of $ 1900000000, making the total value of $ 18400000000 Goodrich company. Federation plans to fund the acquisition with debt and outside equity, where equity will reach 25% of the total.
The company has also taken pains to maintain its credit rating, stop the buyback of shares by 2012 and cut acquisition war chest to about $ 1 billion per year from $ 2 billion to keep the cash balance.
"We are able to pay this debt down relatively quickly," says UTC's Chief Financial Officer Gregory Hayes in a call with analysts.
Hartford, Conn.-based UTC confirms 2011 earnings outlook $ 5.35 to $ 5.45 per share on revenue of $ 58 billion.
