The U.S. Department of Justice on Monday said it has reached an agreement to allow United Technologies Corp. to buy Iowa-based aviation systems maker Rockwell Collins for $30 billion as long the Farmington-based conglomerate makes certain divestitures.
The DOJ determined that without the selloffs, the deal would substantially curb competition for pneumatic deicing systems for aircraft wings and actuators that help aircraft maintain proper altitude.
Only one other company makes that specific type of deicing system, while UTC and Rockwell are also each other’s biggest competitor in the actuator market, according to the DOJ.
The limited competition can make it expensive to install plane deicing systems, giving UTC an incentive and ability to profitably raise prices and offer less favorable contract terms to aircraft manufacturers and aftermarket customers, the DOJ says.
The agency filed a lawsuit in Washington, D.C. federal court on Monday laying out its case as well as a proposed settlement order to resolve it.
DOJ said UTC’s compliance with the order would allow it to proceed with the deal, announced more than a year ago.
In a statement, UTC said it will comply with DOJ’s request.
“The process for closing on Rockwell Collins is moving forward with the recent U.S. Department of Justice approval being the latest milestone,” UTC said in a comment. “Once we have received all of the necessary approvals, we will announce the final closing of this transaction.”
