Rockwell International is to spin off its Collins avionics and communications business as a standalone company at a time when its rivals, Honeywell and Sextant, are being absorbed into larger entities.
The tax-free spin-off to existing shareholders will split Rockwell into two parts: an automation business with revenues of about $4.5 billion a year, and an independently traded avionics and communications company with annual sales of around $3.1 billion.
The spin-off is expected to be completed in the second quarter of 2001. The new Rockwell Collins will remain headquartered in Cedar Rapids, Iowa, and current president Clay Jones will become chairman and chief executive.
Rockwell says the spin-off will enable the two businesses to focus more effectively on their own markets. "We are not doing this manoeuvre to let [Collins] combine with another entity," says Rockwell chairman Don Davis.
Instead, the new "more agile" Collins would like to "take advantage of acquisitions larger than ones we've made in the last year", adds Jones.
Collins, which recently completed the acquisition of displays specialist Kaiser Aerospace and Electronics, has previously shown interest in Litton's navigation and electronic warfare businesses, which were put up for sale recently.
Contrasting with Rockwell's move is the upcoming merger of Honeywell into industrial giant General Electric, and the disappearance of the Sextant name with the rebranding of Thomson-CSF as Thales.
Source: Flight International
