Justice Department Tells UTC To Sell Assets For Goodrich Purchase
By PETE YOST, Associated Press
WASHINGTON (AP) _ The Justice Department said Thursday that United Technologies Corp. must sell some assets in order to proceed with its purchase of aerospace-parts maker Goodrich Corp. in an $18.4 billion deal that is the largest merger in aircraft industry history.
The sale that the department is requiring for the deal to go through involves assets used in the production of electrical power systems and aircraft engine control systems.
The government said the merger, as first structured, would combined the only two significant suppliers of large main engine generators for aircraft in the world, and resulted in higher prices, less favorable contractual terms and less innovation for several aircraft components.
The department filed a proposed settlement in federal court that would resolve competitive concerns about the deal between United Technologies, based in Hartford, Conn., and Charlotte, N.C.-based Goodrich, which makes jet components such as landing wheels and brakes. (Read the DOJ filing)
“The acquisition as originally proposed would have lessened the vigorous competition that currently exists among manufacturers of large main engine generators, aircraft turbine engines and engine control systems for large aircraft turbine engines,” Jamillia Ferris, chief of staff and counsel at the Justice Department’s antitrust division, said in a statement.
Under the proposed settlement, United Technologies must sell Goodrich’s business that designs, develops and manufactures large main engine generators for aircraft, including Goodrich’s shares in TRW-Thales Aerolec SAS. United Technologies also must divest Goodrich’s business that manufactures engine control systems and Goodrich’s shares in Aero Engine Controls, a joint venture to manufacture engine control systems for large aircraft turbine engines.
(Copyright 2012 by The Associated Press. All Rights Reserved.)