United Technologies to Buy Goodrich for $18.5 Billion

Tomahawk, WI 9/22/2011 (PennyPayDay) – Industrial conglomerate United Technologies Corp. is buying aerospace manufacturer Goodrich Corp. 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 soaring. The stock was up more than 11 percent to $122 in aftermarket trading after word of the deal broke late Wednesday.

United Technologies 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 percent premium over Goodrich's closing stock price Wednesday of $109.49. It's a 47 percent premium above the stock's price last Thursday, before word of a pending deal first 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 percent 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," Louis Chenevert, United Technologies' chairman and CEO, said in a statement.

Under the 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 percent, to $122 in aftermarket trading. They slipped $2.33, or 2.1 percent, 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.

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