UTX exploring Goodrich takeover: sources

Reuters

By Andrea Shalal-Esa and Soyoung Kim

(Reuters) - Diversified manufacturer United Technologies Corp is exploring a takeover of aerospace company Goodrich Corp but the two sides are not yet close to a deal, according to a source with knowledge of the situation.

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Reuters reported on Friday that United Technologies was lining up $10 billion to $20 billion in financing for a U.S. acquisition that could shape up as its biggest takeover in a decade.

Investors bid up shares of aerospace companies on the news, with speculation increasingly focused on Goodrich. The stock rose to as high as $112 in after-hours trading on Friday, valuing Goodrich at $14 billion.

A move by United Tech could mark the start of a more aggressive phase of consolidation in the aerospace sector to prepare for cuts in defense spending in the United States and Europe.

Mergers could help the industry lower costs and boost capacity to meet booming demand for components used in commercial aircraft.

Goodrich is benefiting from rising demand for equipment for large planes and sales tied to servicing and parts.

The company has solid exposure to growing commercial aircraft programs. For instance, it supplies a host of parts to EADS unit Airbus, and will design the nacelle and thrust reversers for the Pratt & Whitney geared turbofan engine that is an option for the A320neo aircraft family.

Charlotte, N.C.-based Goodrich also supplies electronic braking and a host of other critical systems to the Boeing 787 Dreamliner, which got U.S. government approval to enter into commercial passenger service last month (August 2011).

Defense and space accounts for about one-third of total Goodrich sales. The company has focused its military strategy on products that guide missiles and gather and process intelligence data.

CEO Marshall Larsen, a 34-year company veteran, told Reuters in June that he'll reach Goodrich's mandatory retirement age of 65 in a couple of years. He was named chairman, president and CEO in October 2003.

Officials at United Tech, which makes products ranging from air-conditioners to helicopters, declined to comment, as did those at Goodrich.

(Reporting by Andrea Shalal-Esa in Washington, Soyoung Kim in New York and Philipp Halstrick in Frankfurt; Writing by Michael Erman in New York; editing by Gunna Dickson)

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