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A Major Buy for United Technologies

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United Technologies

By ALEX VEIGA  AP Business Writer
LOS ANGELES (AP) _ United Technologies Corp. said late Wednesday
that it 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 Wednesday.

United Technologies said it agreed to 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.
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.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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