(Reuters) – United Technologies Corp on Friday received Chinese regulatory approval for its $30 billion purchase of aircraft parts maker Rockwell Collins Inc, clearing the final hurdle to complete the largest aerospace deal in history.
The ticker symbol for United Technologies is displayed on a screen on the floor of the New York Stock Exchange July 20, 2015. REUTERS/Brendan McDermid
The conditional approval for the deal between the two American industrial heavyweights comes during a period of escalating trade tensions between China and the United States.
The dispute between the world’s two largest economies had fanned concerns among UTC shareholders that the merger could fall victim to the growing tensions.
UTC said on Friday the transaction should close within three business days. Last month the company had already expressed confidence of securing Chinese approval for the deal.
China requires both UTC and Rockwell to dispose certain assets, and regulators also specified requirements related to the supply of aircraft components in the country, a statement by China’s State Administration for Market Regulation showed. The market regulator oversees anti-monopoly issues.
Connecticut-based UTC, which makes Pratt & Whitney jet engines, Otis elevators and various aircraft components, is hoping Rockwell will give it more leverage against aircraft makers, which are negotiating for price cuts. UTC’s customers include Boeing, Airbus and Bombardier.
Meanwhile, other major American mergers have run into trouble with Chinese regulators in the backdrop of the trade dispute, the latest being Qualcomm Inc’s failed attempt to buy NXP Semiconductors NV.
Still, China this week gave an unconditional approval for Walt Disney Co’s $$71.3 billion deal to buy Twenty-First Century Fox’s entertainment assets.
UTC, under pressure from activist investors to split itself up, said last month it was considering options including entertaining interest from third parties to buy any of its businesses.
Shares of Rockwell Collins jumped about 9 percent in morning trading in New York, while UTC’s stock climbed about 2 percent.
Reporting by Min Zhang in Beijing, Lee Chyen Yee in Singapore and Arunima Banerjee in Bengaluru, editing by Louise Heavens and Sai Sachin Ravikumar