The European Commission has cleared the way for United Technologies Corp. (UTC) to buy Rockwell Collins, assuming the divestiture of businesses in actuators, pilot controls, ice protection and oxygen systems.

The May 4 announcement—which was largely expected—removes one of the last requirements for the US aerospace companies to clear before merging their operations, expected this summer.

Rockwell Collins is a US-based avionics, IT and aircraft interiors provider while UTC is the parent company of engine manufacturer Pratt & Whitney and UTC Aerospace Systems.

“UTC and Rockwell Collins are two of the biggest suppliers of these components to aircraft makers worldwide,” Commissioner-competition policy Margrethe Vestager said. “We need to ensure that competition is preserved for all of them. We can allow this merger to go ahead because in all the markets where we raised concerns, UTC has committed to divest activities covering the entire overlap between the two companies.”

The Commission had been concerned that the $30 billion tie-up would have reduced competition for trimmable horizontal stabilizer actuators (THSAs), throttle quadrant assemblies and rudder brake pedal systems, pneumatic wing ice protection and oxygen systems. In THSAs, there already were limited competitors, and in oxygen masks, Rockwell was a leader while UTC had planned earlier to enter the market.

To address concerns, UTC offered to divest Rockwell’s entire global business in ice protection, located in a single U.S. facility, and UTC’s two research projects in oxygen systems.

Otherwise, there were no major worries. “The Commission concluded that other overlaps and vertical links between UTC and Rockwell Collins' activities did not lead to any competition concerns, mainly because of the existence of a sufficient number of alternative suppliers.”

The divestitures are being closely watched by the investment community, which has been anticipating merger and acquisition activity since UTC leaders this year started talking about reviewing the multi-industrial conglomerate’s business portfolio after the Rockwell acquisition closes. Besides potentially spinning off non-aerospace elements of UTC, analysts have questioned how much of Rockwell, and specifically Interiors, UTC would want to keep long-term since the deal was announced in September.

Michael Bruno/Aviation Week michael.bruno@aviationweek.com