TransDigm Group Inc. and United Technologies Corp. have canceled the former’s previously agreed purchase of UTC’s Goodrich Pump & Engine Control Systems (GPECS), announced in October for a reported $236 million. The two companies called it a mutual decision and said it follows a U.S. Department of Justice objection to the sale.
The reason for the Justice Dept.’s objection is not known.
GPECS designs and manufactures advanced electronic engine controls, fuel metering units, and main fuel pumps, mostly for military aircraft. At the time of the purchase announcement, TransDigm estimated about 40% GPECS’ revenues in 2012 came from the commercial aircraft market.
United Technologies is trying to sell the pump and engine control systems unit in order to comply with the divestitures required by regulatory authorities as a condition of its $18.4-billion takeover of Goodrich Corp. In a statement, UTC said it intends to comply with its obligation to sell this business, but it must locate a buyer acceptable to the U.S. DoJ and the European Commission. “Any proposed transaction would be subject to regulatory approvals in the U.S. and other jurisdictions and to other customary closing conditions,” it announced.
Cleveland-based TransDigm Group is a holding company for numerous wholly owned subsidiaries that produce engineered aircraft components.
GPECS designs and manufactures highly engineered electronic engine controls, fuel metering units, and main fuel pumps, mostly for military aircraft though TransDigm estimated about 40% of its revenues in 2012 came from the commercial aircraft market.
W. Nicholas Howley, chairman and CEO of TransDigm, stated: "The consent agreement between UTC and the Department of Justice, which provided the Department of Justice the right to approve the acquirer of GPECS in its sole discretion, made this an unusual situation and process.
“We do not believe that this will impact future acquisitions," he added.