Beacon Transcript – Rockwell Collins will be buying B/E Aerospace, the airline supplier company at a record price tag for the avionics company.
B/E Aerospace, the aircraft supplier is the largest and biggest name is its area as it offers all types of cabin supplies and equipment, from luxurious seats to modular lavatories.
Rockwell Collins will be acquiring the aforementioned company at a price of $6.4 billion, which will mark it as the company’s biggest buy.
The avionic company, Rockwell Collins has an 83 years old history, but this will be its largest investment following its 2013 Arinc buy which was set at a $1.39 billion price tag.
The respective deal was finalized just a short number of days after the company chose its new chief executive, Kelly Ortberg, and also gave Rockwell the chance to introduce new data in aircraft, besides the company’s existing aircraft components products.
The company’s B/E Aerospace buy will also offer an even larger scale approach to the area as the new information and products will now be targeting airline operators.
According to Ortberg, Rockwell sees this as one of the first steps towards the future, as they are already believe that aircraft and air travel will be getting increasingly smarter over the next years.
As technology is advancing, the company considers it as just a matter of time before all the elements of a flight, from maintenance crews and ground airline workers, to the toilet valves will be connected in real time and work flawlessly together.
The deal between B/E Aerospace and Rockwell Collins is set to be finalized in 2017 and is amongst the latest to target the Airbus and Boeing supply companies.
The B/E Aerospace group will be getting a $27.90 part in shares and a $34.10 in cash which will account for $62 of Rockwell’s shares.
As part of the sale, Rockwell has also taken on the assumption of B/E’s debt, which will account to $1.9 billion out of the total $8.3 price.
The two companies offer quite complementary products, with Rockwell targeting more the smaller planes sector, whilst B/E works with the big ones, the widebodies.
Their combination, besides offering both a vehiculated savings’ value of around $160 million, could also come to mean better flight services for the customers, as the companies could come to retrofit their services and offer a more luxurious travel.
As the transaction has been approved by both the B/E Aerospace and Rockwell Collins’s boards, the final decision will now rest in the hands of the two comapnies’ shareholders.
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