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Chinese Approval For UTC To Acquire Rockwell Collins

Chinese Approval For UTC To Acquire Rockwell Collins
The largest ever acquisition in the history of the aerospace industry is now almost complete after the United Technologies Corp obtained a green signal form Chinese authorities about the acquiring of the aircraft parts maker Rockwell Collins Inc in a deal that is worth $30 billion. The clearance from the Chinese anti trust authorities was the last approval that the deal needed to get completed.
The Chinese authorities however granted conditional approval to the deal for the merger of the two giants of the American industrial sector and this clearance comes at a time when the trade tensions between the United States and China are on an escalatory path. 
There was a sense of growing concerns and apprehension among the shareholders of UTC about merger not getting Chinese regulatory approval and falling prey to the escalating trade war between the two largest economies of the world.
According to a statement issued by UTC, the two companies would be able to close down the deal and complete it within a matter of a few days. Confidence that it would be able secure an approval from the Chinese authorities had been expressed last month by the company. 
But according to the conditional approval issued by the Chinese authorities, some portion of their assets would be required to be disposed off through sale to third parties by both the company - UTC and Rockwell. Further, according to a statement issued to the press by the State Administration for Market Regulation of China, some specifications and requirement related to the supply of aircraft components in the country were also issued by iy which have to be followed y the new entity. Anti-monopoly issues in china are looked after by the Administration for Market Regulation.
UTC, which is based in Connecticut, US, is hopeful of gaining more leverage and competitive advantage against those aircraft makers that are engaged in negotiations for a price cut. Apart from its presence in the aerospace industry, UTC also manufactures the Pratt & Whitney jet engines, Otis elevators and various aircraft components. Boeing, Airbus and Bombardier are among the customers of UTC.
While this deal did manage to make through the Chinese regulatory process, the escalating trade war between China and the United States has put into jeopardy a number of other major American mergers and acquisitions. The latest among them is the failed attempt by Qualcomm Inc to acquire NXP Semiconductors NV.
But another US company that is not linked to manufacturing and technology was given an approval by Chinese antitrust authorities. It is the acquisition of the entertainment assets of Twenty-First Century Fox by Walt Disney Co in a deal worth $71.3 billion.
UTC had announced last month that it was actively considering multiple options which included the possibility of accepting interests from third parties for the purchase of any of its business. This was primarily because of sustained pressure from activist investors demanding that the company be bifurcated into two separate companies.

Christopher J. Mitchell

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