United Technologies (NYSE: UTX) is mulling offers from Lockheed Martin (NYSE: LMT) and Textron (NYSE: TXT) to purchase UTC’s Sikorsky Aircraft subsidiary, Reuters reported Wednesday.
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“UTC is considering proposals from the two companies, and is expected to make a final decision by the end of the month”.
Providence-based Textron, which also owns Cessna, has a market capitalization of $12.5 billion, debt of $3.8 billion and $560 million in cash on hand as of April 30, making it unable to buy Sikorsky on its own.
UTC has reportedly made it clear it is not interested in a share swap that would see it take shares in Textron in return for control of the company.
Said to be the world’s largest helicopter producer, Sikorsky manufactures military, commercial and VIP helicopters for the US Government. People familiar with the process had said that arrangement would have had substantial tax savings.
Boeing Co (BA.N), which had expressed interest in a potential deal, is no longer active in the sale process, the sources said. A Textron spokesman declined to comment to AIN and said any statement would not come from the company until its July 28 earnings conference call. If Textron is the winning bidder, it would help the company expand its existing Bell Helicopter business which is based in Fort Worth. The acquisition of Sikorsky will support Lockheed to achieve strong revenues in the medium term, according to the news agency. Secondly, United Technologies officials say the unit does not fit well with the company’s portfolio.
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Lockheed and Sikorsky already work together on several major helicopter programs, including the presidential helicopter, a combat rescue helicopter and the MH-60R- and S-model helicopters built for the Navy and Marine Corps.
