United Technologies (UTX) and Rockwell Collins (COL) are inching toward an accord for the biggest-ever merger in the aerospace industry, with Boeing (BA) withdrawing its objection. Surprisingly, there are hardly any regulatory obstacles to this merger. The deal didn’t stumble on any antitrust issues. But it did disturb Boeing and European rival Airbus, both voicing their opinion against the mega-deal stating that it would damage competition.
This is not the first that Boeing and Airbus have been against a potential merger in its sector. Both companies displayed a similar disagreement when Honeywell and United Tech were musing on a deal.
The two giants were tough on this new merger as well. Boeing even threatened to end some of its contracts with United Tech’s UTC aerospace system division and Rockwell — Boeing’s major suppliers of avionic systems — as the union of the two companies could cut competition within the supply chain. Many have pointed out that the potential merger would hit Boeing’s in-house supplier Boeing Avionics, dragging it into the competition.
But all that is in the past now, with Boeing giving its thumbs up on United Tech and Rockwell’s mega-deal. The aircraft giant changed its statements after it reached an agreement with the two suppliers to help assist the company’s cost-cutting initiative.