Pratt & Whitney
Pratt & Whitney, manufacturer of commercial and military aircraft engines, will be united with Collins Aerospace Systems as the core of the new United Technologies.

United Technologies Breaking Up Into Three Parts

Nov. 27, 2018
Pratt & Whitney, Collins will form an aerospace manufacturer; Otis Elevator and Carrier will be new businesses

Having completed its $23-billion purchase of Rockwell Collins, United Technologies Corp. plans to split its organization into three companies, explaining that each new business will have "strategic focus and financial flexibility" to innovate and "drive long-term value." The break-up had been reported in financial markets for several weeks and activist investors had been arguing for the move in the interest of shareholder value.

According to UTC chairman and CEO Gregory Hayes told CNBC the decision to break up the company followed the board’s realization that each of the new businesses could succeed independently.

The three businesses will be:
•  United Technologies, comprised of aircraft engine designer and manufacturer Pratt & Whitney; and Collins Aerospace, the former Rockwell Collins, a supplier of electrical, mechanical, and software for commercial and military aerospace programs.
•  Otis Elevator Co., manufacturer of "people-moving products" like elevators, escalators, and moving walkways. 
•  Carrier, a developer of HVAC, refrigeration, fire, security, and building automation technologies. The portfolio includes brands like Carrier, Kidde, Edwards, LenelS2, and Automated Logic.

The spin-offs of the Otis and Carrier businesses will be arranged as tax-free distributions to current UTC shareowners.  Each spin-off will be subject to customary conditions, including final approval of the UTC directors.

Hayes will oversee the transition and will continue in his current role as UTC chairman and CEO.

Analysts estimate breakup will cost $2.5 billion to $3 billion, to set up individual IT and tax systems for the two new companies. UTC expects the separation to be completed in two years.

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