U.S. aircraft component maker Rockwell Collins (COL.N) is set to gain unconditional EU approval for its $6.4 billion bid for aircraft interior maker B/E Aerospace (BEAV.O), two people familiar with the matter said on Wednesday.
The deal will boost Rockwell Collins’ exposure to a record pipeline of commercial aerospace equipment purchases and expand its relatively modest presence in lucrative aftermarkets.
The two U.S. companies have little product overlaps, with Rockwell active in avionics and flight control systems while B/E Aerospace is a major supplier of aircraft seats, galleys, lighting, and lavatories.
The European Commission, which is scheduled to rule on the deal by April 12, declined to comment. Rockwell Collins and B/E Aerospace did not immediately respond to requests for comment.
Securing EU approval without conditions will be a major step toward closing the deal, which Rockwell aims to do within the next few months.
Pricing pressures from Boeing (BA.N) and Airbus (AIR.PA) are seen as one factor which triggered the deal. The merged company has forecast cost savings of about $160 million due to greater buying power with suppliers and combined information technology systems.
The Rockwell deal has also renewed speculation of more tie-ups in the sector. French aero engine maker Safran (SAF.PA) launched a $9 billion takeover bid in January for seats maker Zodiac Aerospace (ZODC.PA) to create the world’s third-largest aerospace supplier.
Source: Reuters.com