ABAG – Associação Brasileira de Aviação Geral

Notícias e Agenda ABAG

EC OK of Collins/UT Combo Paving Way for Super Supplier

EC OK of Collins/UT Combo Paving Way for Super Supplier

The European Commission announced its approval of United Technologies Corp.`s (UTC) proposed acquisition of Rockwell Collins on May 4, setting a condition that the combined entity divest overlapping businesses in the areas of actuators, pilot controls, ice protection, and oxygen systems.   "We can allow this merger to go ahead because in all the markets where we raised concerns, UTC has committed to divest activities covering the entire overlap between the two companies," said commissioner Margrethe Vestager, who steers the EC competition policy. "We need to ensure that competition is preserved for all of them [given the scope of activities involved.]"   The proposed $30 billion acquisition, first announced late last summer, would bring together two aerospace giants. UTC's larger portfolio covers power generation, propulsion systems, and landing systems, while Rockwell Collins serves as a major supplier of avionics and different cabin interior products, the EC noted.   The Commission investigation raised concerns about reduced competition for trimmable horizontal stabilizer actuators (THSA), certain pilot controls (throttle quadrant assemblies and rudder brake pedal systems), pneumatic wing ice protection, and oxygen systems, it said.   Under the conditional approval, Rockwell Collins would have to sell its THSA and pilot control businesses, based primarily in the U.S. and Mexico, along with its entire global business in ice protection. Meanwhile, UTC would divest its two oxygen systems "research projects."   Aside from those areas, the Commission determined that "other overlaps and vertical links between UTC and Rockwell Collins activities did not lead to any competition concerns," because enough other competition exists.   The Commission further concluded that a merged Rockwell Collins/UnitedTechnologies entity would neither control the market power nor incentives to shut out competitors through practices such as bundling or tying.   But Epstein noted that the new "Collins Aerospace" combined entity will manufacture components in almost every area of the airplane. On Bombardier`s C Series, for instance, he noted that the combined entity will account for nearly 40 percent of the value of the aircraft. "So then you have to scratch your head and say…who`s the OEM?" he asked rhetorically.   These mergers will create super suppliers, which Epstein said would exist as something more than Tier One, but rather Tier 0.5. "They can do your engines, they can do your avionics, they can do your control systems, they can do your actuators, you name it," he said. "That's an important changing dynamic in the supply chain."   FONTE: AINonline by Kerry Lynch

Fique por dentro das
notícias da ABAG

Assine nossa newsletter.