Posted on 06/15/2015 9:37:47 AM PDT by Brad from Tennessee
LONDON — The United Technologies Corporation said on Monday that it planned to either sell or spin off Sikorsky Aircraft, the maker of the Black Hawk helicopters favored by the United States military.
The announcement follows a review of strategic alternatives for the 90-year-old Sikorsky business that United Technologies conducted this year. A decision on whether to spin off or sell the business is expected by the end of the third quarter and is subject to the approval of the company’s board of directors.
“Our strategic review has confirmed that exiting the helicopter business is the best path forward for United Technologies,” Gregory J. Hayes, the United Technologies president and chief executive, said in a news release.
“Sikorsky is the world’s premier helicopter company, and through a series of strategic wins is well positioned for long-term growth,’’ he said. “However, separation of Sikorsky from the portfolio will allow both United Technologies and Sikorsky to better focus on their core businesses. Over the coming weeks, we’ll determine whether a spinoff or direct sale is the best way to enhance Sikorsky’s long-term success and create the most value for customers and shareholders.”
(Excerpt) Read more at nytimes.com ...
“Spin off” is not something you want to hear from a helicopter manufacturer. ;-)
So all the much ballyhooed convergence/leverage/integration payoffs when the purchased them 5-10 years ago didn’t come to pay off afterall. Curious if it was the culture or the technology that didn’t quite work out. I’m guessing the former.
Wonder what they’re stripping out of the package to keep for themselves long term.
I’ve seen that happen with several aerospace companies. previous competitors merge, and then try to unify the culture. Often, it does not work, and eventually, the result is this.
None of those "spin-offs" had any beneficial effect upon the share-price.
Also, while I may have original held stock in, say, a telecommunications company, I then ended up holding shares in one company that owned and leased out telecom infrastructure (and which had inherited most of the company debt) and a second company which actually operated the infrastructure (but was largely debt-free).
To add to the confusion, one of the new companies may still retain some equity in the spin-off. Mighty confusing.
Just sayin'.
Regards,
It was just a year ago that Sikorsky won the bid to make the S-92 the next "Marine One" POTUS helicopter. What happened?
They are claiming Off Shore Oil Helicopter Sales are trying up. Thank you Lear Deader, or thank the Fracking Revolution.
I also wonder if UTX is trying to get out a market that might have a number of the functions that require a man carrying sale-able item be seemed as way too expensive with the advent of UAV's and their capabilities increasing exponentially and not just small little electric jobbies. It may not be in their wheelhouse given they sell bigger Helicopters, but these advances could encroach into their territory. Maybe they are getting out while the gettin' is good...
United Technologies has owned Sikorky since the 1930’s.
One big problem with Sikorsky is that almost all of their helicopters use UTC’s competitors engines.
What happened is they want to sell at a profit.
Only Losers sell at a loss. Someone else can make money off future government helicopter sales (and move the work out of CT, who knows)
UTC doesn’t want to be the one seen moving jobs out of CT, when they are getting huge tax breaks from CT.
I’m not saying UTC won’t buy something stupid with their Sikorsky cash stash, but There are a lot of businesses out their that are closer to their core that they should look to purchase (like current, high volume suppliers to their other core businesses).
Excellent observation.
I fish the Housatonic River right near the plant below Derby,CT.
Great watching the Blackhawks buzz around after repairs. Fly right over us.
Hmm maybe I’m confusing it with a ge bid in the same timeframe
(Reuters) - Sikorsky Aircraft, a unit of United Technologies Corp, on Tuesday said it would cut 1,400 jobs and consolidate facilities, with lower oil prices sharply reducing demand for helicopters in the oil and gas sectors, and international military orders down.
Sikorsky spokesman Paul Jackson confirmed the job cuts, in which workers and the company's union were notified earlier Tuesday, but said the move was not related to the parent company's ongoing review of strategic options for Sikorsky.
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“Sustained decreases in oil prices continue to drive significant declines in capital investments by oil companies in offshore oil exploration projects impacting Sikorsky and resulting in reduced production levels,” Jackson said.
He said demand for certain international military products had also dropped.
United Technologies in April cited pressure in the oil and gas sector as it reported an 11 percent drop in Sikorsky's first-quarter operating profit and a 7 percent decline in sales.
http://www.reuters.com/article/2015/06/02/united-tech-sikorsky-idUSL1N0YO1HK20150602
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