United Technologies Says It Will Break Up into 3 Independent Companies
United Technologies, a manufacturing conglomerate with products ranging from jet engines to elevators, said Monday it will break up into three separate companies.
One of the new companies, which will keep the name United Technologies, will contain its Pratt & Whitney aerospace business along with Rockwell Collins, an acquisition that will also close Tuesday. A second company will be called Otis, manufacturing elevators and escalators. A third, Carrier, will make heating and air-conditioning systems along with fire safety and security products.
The investor-relations site for United Technologies’ included a notice of a conference call with analysts and investors, scheduled for 8am ET Tuesday, to discuss the move. The company also made a brief announcement of the move on Twitter.
“Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth,” CEO Gregory Hayes said in a statement. “As standalone companies, United Technologies, Otis and Carrier will be ready to solve our customers’ biggest challenges.”
Analysts and investors have been speculating about the possibility of breaking up United Technologies for some time. More recently, activist investors, including Bill Ackman of Pershing Square and Dan Loeb of Third Point, have been pressuring United Technologies to break up into separate companies, arguing that the individual businesses would be more likely to trade at fair value on their own.
United Technologies is one of the oldest component stocks in the Dow Jones Industrial Average, entering the closely watched index in 1939, when it was named United Aircraft. The company expanded into other areas of manufacturing over the decades. It’s not clear whether the stock will be replaced in the Dow Jones Industrial Average.
Last month, United Technologies said it expects revenue in 2018 to reach as high as $64.5 billion in 2018, which would mark a 7.8% increase from its 2017 revenue. United Technologies’ stock was trading as much as 2.4% higher in after-hours trading on the news.