* Confident in face of EU antitrust review
* Says sale of Rocketdyne, industrial units on track
By Scott Malone
May 22 United Technologies Corp is
confident that its $16.5 billion takeover of aircraft components
maker Goodrich Corp will close in July, despite a
continuing European Union antitrust review of the deal.
"We have good confidence ... that we will close by mid- to
late July," United Tech Chief Executive Louis Chenevert told an
investor conference on Tuesday. "We have been working
aggressively with the customers, with the agency, for antitrust
That expression of confidence comes less than a week after
EU antitrust regulators extended to Aug. 31 from Aug. 9 their
deadline to decide whether to approve the deal.
"We have done the right things to wrap this deal up,"
Chenevert said, though he declined to directly address the state
of the antitrust review.
The world's largest maker of elevators and air conditioners
is also confident it will be able to close the sale of three
small units that it put on the block in March -- its Rocketdyne
space business, the industrial arm of its Hamilton Sundstrand
division, and its Clipper Windpower operation.
INTEREST IN INDUSTRIAL ARMS
Hartford, Connecticut-based United Tech aims to be in
contract on Rocketdyne by mid-June and is "seeing very good
interest in the auction process for the industrial businesses,"
Chenevert said at the Electrical Products Group conference in
Longboat Key, Florida.
The company expects to close its sale of Clipper by the
year's end, said Chenevert, whose talk was monitored over the
United Tech put the three units up for sale to raise cash
and avoid having to immediately issue new common shares to fund
the Goodrich deal, its biggest acquisition in a decade. It
originally planned to issue $4.6 billion in new shares to pay
for the takeover. But in the face of shareholder objections, in
March it unveiled a new plan to sell the three businesses --
which it estimates will bring in about $3 billion -- and to
issue $1.5 billion in mandatory convertible notes, in addition
to taking on debt.
Chenevert declined to answer analysts' questions on whether
the company would be able to reduce or eliminate the number of
new convertible notes, which would eventually become shares.
United Tech shares were up 1 percent at $74.44 in afternoon
trade on the New York Stock Exchange.
DEAL-MAKING PICKS UP
The pace of deal-making has picked up in the manufacturing
industry this year, most recently seen in Monday's news that
Eaton Corp has reached an $11.8 billion deal to acquire
electrical equipment maker Cooper Industries Plc.
United Tech officials earlier this month said negotiations
to sell Rocketdyne were focused on one buyer.
Private equity firms TPG Capital and Carlyle Group LP
are separately considering bids for the Hamilton industrial
units, which make pumps and compressors, people familiar with
the matter told Reuters last week.
A return of private equity dealmakers to the sector could
push takeover prices higher, said Brian Jellison, CEO of
manufacturer Roper Industries Inc, speaking at the same
conference on Monday.
"Seller expectations are extraordinarily high, the highest
ever. That's because ... banks have lost, again, all
discipline," Jellison said, adding that his company was recently
outbid on an acquisition it wanted to do by a private equity
"People are buying and paying for quite a high price. I
think it would be very interesting to see what ultimately United
Technologies gets for Milton Roy and what do they get for
Sullair and how does that kind of -- does one person buy it and
how does that work out," Jellison said, referring to two of the
Hamilton industrial arms that United Tech is aiming to sell.