On Monday, an announcement was made by United Technologies Corp that the company would be segregating into three different companies.
These companies would be consisting of building divisions, elevators along with aerospace. This breakup will make United Technologies the first conglomerate to pursue this.
The company will also be closing the deal of acquiring the maker of avionics, Rockwell Collins for $30 billion. This acquisition will give enough space to the aerospace business of the United Technologies so as to be a standalone company.
The decision of segregation is in the wake of the acquisition of Rockwell Collins, from the power grasped by the acquisition to be a standalone company.
This move of segregation by the company is in accordance with the moves by other companies including DowDuPont Inc, General Electric Co as well as Honeywell International Inc. these companies have shredded their major divisions because the investors give more value to their parts rather than their sum.
The Chief Executive of United Technologies, Gregory Hayes had sent signals that he was considering the move for most of the past year.
The split of the company has also been given green signal by Third Point LLC which is the firm of Daniel Loeb along with Perishing Square Capital Management which is the firm of William Ackman.
In a statement released by the Chief Executive of the company, he had stated that the decision of the company to segregate is a pivotal moment in the history of the company and they aim to best position each independent company so as to drive the sustained growth.
On Monday, in extended trading, the shares of United Technologies had increased by 2.2 percent reaching $130.81.
The company has a market capitalization of $102.5 billion and thus becomes the first company to pursue a split that is three-way.
Source: Reuters, NewYorkTimes
