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July 9, 2015

UTC shortlists Lockheed and Textron for $8bn Sikorsky Aircraft business deal

United Technologies (UTC) has reportedly shortlisted Lockheed Martin and Textron for the acquisition of its Sikorsky Aircraft business.

United Technologies (UTC) has reportedly shortlisted Lockheed Martin and Textron for the acquisition of its Sikorsky Aircraft business.

Reuters reported citing people familiar with the matter that final decision on this deal, which is expected to be valued at approximately $8bn, will be announced by the end of this month.

Sources also added the company may spin off Sikorsky to shareholders in a tax-free deal. In June, UTC announced it will pursue the separation of the Sikorsky Aircraft business following a review of strategic alternatives for Sikorsky.

"Sikorsky is the world’s premier helicopter company and through a series of strategic wins is well positioned for long-term growth."

UTC president Gregory Hayes said: "Sikorsky is the world’s premier helicopter company and through a series of strategic wins is well positioned for long-term growth.

"However, separation of Sikorsky from the portfolio will allow both United Technologies and Sikorsky to better focus on their core businesses."

Textron, the maker of Bell helicopters and Cessna aircraft, proposed a reverse morris trust (RMT) merger between Sikorsky and Textron, the news agency reported. Textron has a market capitalisation of approximately $12bn.

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After UTC rejected the proposal, Textron seeked help from private equity firms to support the acquisition.

Lockheed and Sikorsky are currently working together on several programmes for the US Navy and the US Marine Corps. The acquisition of Sikorsky will support Lockheed to achieve strong revenues in the medium term, according to the news agency.

Boeing also expressed interest in a potential deal to purchase the aircraft business.

UTC said the company, excluding Sikorsky, is expecting 2015 earnings per share of $6.35-$6.55 on sales of $58-$59bn.

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