United Technologies Corp. is moving closer to an agreement to buy Goodrich Corp. in an all-cash deal and may announce a takeover as soon as Wednesday, according to two people with knowledge of the discussions.
The companies were negotiating a price of $110 to $120 a share at the end of last week, said one of the people, who declined to be identified because the matter is private. The gap had narrowed to $5 a share as of Sept. 18, the person said.
Buying Goodrich would add the world’s largest maker of aircraft landing gear to an aerospace portfolio at Hartford, Connecticut-based United Technologies that includes Sikorsky helicopters, Pratt & Whitney jet engines and the Hamilton Sundstrand unit, whose products include aviation electronics.
Goodrich closed at $86.48 on Sept. 15 in New York Stock Exchange composite trading. The shares have surged since Bloomberg News reported Sept. 16 that United Technologies was in talks to acquire the Charlotte, North Carolina-based company. They rose $4.22, or 3.9 percent, to $111.82 Tuesday.
United Technologies may announce a takeover after the close of U.S. markets tomorrow, or on Sept. 22, the people said.
John Moran, a spokesman for United Technologies, declined to comment. Spokesmen for Goodrich didn’t immediately return calls or e-mails seeking comment.
“If United Technologies were able to acquire Goodrich for $125 a share, that would be a good price for both sides,” Robert Stallard, an RBC Capital Markets analyst in New York, said Tuesday in a note to investors. He recommends buying United Technologies and Goodrich.
Goodrich’s market value today was $14 billion, according to data compiled by Bloomberg, while United Technologies was at $69.1 billion. United Technologies gained 46 cents today to $76.01, little changed since closing at $75.61 on Sept. 15.
Adding commercial aerospace revenue would be a boost for United Technologies after Pratt’s geared turbofan engine failed to win placement on Boeing Co.’s upgraded 737. Chief Executive Officer Louis Chenevert spent more than $1 billion and a decade developing the engine, an option on the Airbus SAS A320neo that competes with the 737.
United Technologies had $5.4 billion in cash and near- cash items at the end of last quarter, and posted sales of $54.3 billion in 2010. Goodrich reported revenue of $6.97 billion last year.
Besides landing gear, Goodrich’s aerospace products include nacelles, the casings that hold jet engines; electronics; and temperature-control systems.
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