United Technologies to split into three companies

Published 28.11.2018 00:00
Updated 28.11.2018 00:49

United Technologies is to break into three independent entities, following in the footsteps of companies like General Electric or Honeywell and splitting one of the last industrial conglomerates in the U.S.

CEO Gregory Hayes had previously hinted at dividing the $103 billion conglomerate, based in Farmington, Connecticut, and on Monday the company made the decision final.

One of the new stand-alone entities will keep the name United Technologies (UTC) - made up of Collins Aerospace and Pratt & Whitney, that had a combined sales of $39 billion in 2017 - and be focused on aerospace.

That company will be rounded out by aeronautics manufacturer Rockwell Collins, which United Technologies had acquired in 2017 in a $30-billion buyout.

Otis meanwhile will produce elevators and escalators while Carrier will make equipment including heating and cooling products.

"Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth to lead its industry in innovation and customer focus, and maximize value creation," Hayes said in a statement.

Hayes will continue to work as UTC's CEO and chairman following the split, which is set for completion in 2020.

The move follows a trend in the United States of dividing industry giants to focus on core business or to become more flexible. General Electric, for example, has started offloading many subsidiaries to try to stop its slump in the stock market and handle difficulties in its energy division.

Industrial goods giant Honeywell meanwhile spun off its resins and chemicals business to focus on high-value software and technology products.

And DowDuPont - born in 2017 after a $130-billion marriage of two U.S. agrochemical groups, Dow Chemical and DuPont - is preparing to split into three entities. On Wall Street investors took the United Technologies news well, with stock going up 1.63 percent in Monday's electronic trading.

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