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United Technologies to separate into three independent companies



(Reuters) – United Technologies Corp (UTX.N) said on Monday it would separate into three independent companies consisting of its aerospace units, Otis elevators division and Carrier air-conditioning business, as the industrial conglomerate bows to pressure from activist investors.

FILE PHOTO: United Technologies logo is displayed on a screen at the post where it’s stock is traded on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 5, 2017. REUTERS/Brendan McDermid/File Photo

The company’s shares were up 2.2 percent at $130.81 in extended trading.

Daniel Loeb’s firm Third Point LLC and William Ackman’s Pershing Square Capital Management have built stakes in UTC this year, with Loeb arguing here that a split could unlock $20 billion in value for shareholders.

The decision comes after UTC completed its acquisition of aero parts maker Rockwell Collins following the approval from China, the last major hurdle to the separation.

The business, along with the Pratt and Whitney engines unit and UTC’s own aerospace systems, will now be known as United Technologies. The combined business generated total sales of $39 billion in 2017 on a pro forma basis.

UTC plans to spin off the Otis and Carrier air-conditioning businesses tax free to shareholders and expects the separation to be completed by 2020.

Otis reported sales of $12.3 billion last year, while the Carrier unit had revenues of $17.8 billion.

“Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth,” Chief Executive Officer Greg Hayes said in a statement.

Hayes will continue in his current role as UTC Chairman and CEO after the separation, the company said.

UTC raised its 2018 sales forecast to a range of $64.5 billion to $65.0 billion, up from $64.0 billion to $64.5 billion previously, to include the Rockwell Collins acquisition.

The company expects 2018 adjusted earnings per share of between $7.10 and $7.20, down from $7.20 and $7.30 earlier.

Reporting by Ankit Ajmera in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila







Kenyan Digest