Debbie Packman
BFGoodrich is in confident mood as the completion of its $2.2-billion merger with Coltec Industries draws tantalisingly close.
CEOs Dave Burner (BFGoodrich) and John Guppy (Coltec) appeared together at the show yesterday to reveal that the 'friendly' union awaits a final decision from the appeals court next week before it becomes official.
When complete, the newly expanded company is expected to bring in annual revenues of around $6 billion, placing it near the top of the market table in aerospace systems and services, performance materials and now industrial products.
The move is the biggest a string of takeovers by BFGoodrich, which has made 38 acquisitions in the last decade, topping the $1 billion takeover of Rohr Industries two years ago.
Following this latest move, the company will have doubled its size in less than three years, putting it among the USA's 300 largest companies and ranked number two in the North American aerospace market.
"With Coltec we will be bigger, stronger and more profitable," says Burner, whose main aim for his shareholders is to boost revenues while maintaining margins.
"We will be even further along in establishing BFGoodrich as a leading multi-industry company with enhanced prospects for consistent profit growth."
Coltec brings landing gear, sensors, fuel and integrated systems, crew seats and engine components to the partnership, boosting the new company's aerospace revenues to 65%. Performance materials will account for 30%.
Which arm retains the landing gear business will be reviewed along with other areas for efficiencies as Coltec becomes fully integrated with BFGoodrich at Coltec's North Carolina headquarters.
If next week's decision goes in BFGoodrich's favour, it will be the final hurdle for the partnership which has faced aggressive challenges from AlliedSignal and Crane since it was first mooted last year.
But fears that the merger will result in a near-monopoly are unfounded, says the company, as powerful customers such as Boeing, Lockheed Martin and the airlines control the bidding for landing gear, dictating marketplace competition and prices.
Nor will landing gear be designed in such as way that only its own wheels and brakes can be used, they say, as aircraft manufacturers have firm and fair specifications. Most also use two sources of wheels and brakes leaving the market open for competitors.
Clearance by the US Federal Trade Commission, the Department of Defense and a 96% vote in favour by the shareholders all point to a positive verdict for the duo and a failed lawsuit for the challengers.
Source: Flight Daily News
