United Technologies Corp.
) recently announced the signing of an agreement to divest its
Pratt & Whitney Power Systems unit, which is currently a part
of Pratt & Whitney, to Mitsubishi Heavy Industries (MHI).
With the divestiture of its Power Systems Unit, United
Technologies intends to better focus on its aerospace and
The terms of the deal remained undisclosed but the transaction
is expected to close by the second quarter of 2013, subject to
regulatory approvals and customary closing conditions.
Pratt & Whitney Power Systems unit primarily deals with
the engineering, assembly and sales of aero-derivative gas
turbines and also provides services related to gas turbines and
engineering, procurement and construction of related power
generation systems. This business is an excellent fit for
Mitsubishi as it is mainly focused on gas turbines
Through this acquisition, Mitsubishi Heavy Industries is
expected to expand its power generation product portfolio. Pratt
& Whitney Power Systems aero-derivative gas turbines are
highly recognized worldwide, for their integrated design and
quick start-up time. Apart from this deal, both these companies
have worked together for an aero-engine production.
Moreover, Mitsubishi is presently looking to establish a
global structure to substantially increase manufacturing capacity
of high temperature high-output gas turbines annually.
In 2012, Mitsubishi announced a Medium-Term Business Plan, to
primarily set a policy for full utilization of its strengths and
synergy. Thereby it reorganized its business segments into four
domains. Among the four business domains, the company is
currently considering the Energy & Environment segment to
have the highest importance. The acquisition of Pratt &
Whitney's Pumps is a part of this business plan.
Pratt & Whitney, a division of United Technologies is
leading player in the design, manufacture and service of aircraft
engines, space propulsion systems and industrial gas
United Technologies currently has a Zacks Rank #3, implying a
short-term Hold rating on the stock.
UTD TECHS CORP (UTX): Free Stock Analysis
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