Rockwell Collins buys B/E Aerospace for $6.4B

Aviation tech company Rockwell Collins will spend $6.4 billion to acquire aircraft interior manufacturer B/E Aerospace.

Under the terms of the deal, expected to close in the spring of 2017, B/E Aerospace shareholders get $34.10 per share in cash and $27.90 in shares of Rockwell Collins common stock, a 22.5% premium B/E Aerospace common stock’s closing price on Friday.

Rockwell will also assume $1.9 billion in net debt. Upon the merger’s completion, B/E Aerospace shareholders will own about 20% of the combined company.

The acquisition would combine Cedar Rapids, Iowa-based Rockwell Collins’ avionics expertise with the Wellington, Fla.-headquartered B/E Aerospace’s flight cabin interior products to better both companies’ aircraft customers.  “This transformational acquisition is consistent with our strategy to accelerate growth and build value through market-leading positions in cockpit and cabin solutions,” said Rockwell Collins President and CEO Kelly Ortberg in a statement announcing the deal Sunday. “We see tremendous opportunity to better serve our commercial aviation, business jet and military customers through broader offerings.”

B/E Aerospace CEO Werner Lieberherr will become an executive vice president and chief operating officer of a newly created aircraft interior systems segment for Rockwell Collins. Rockwell will add two B/E Aerospace board members to its board of directors increasing its size to 11.

B/E Aerospace (BEAV) shares Monday soared more than 15% to $58.59 on news of the deal. Rockwell Collins (COL) shares were down 5.6% to $79.70.