EC reveals conditions for clearing Goodrich acquisition by UTC

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United Technologies (UTC) has agreed to divest Goodrich businesses with products involving electrical power generation and engine controls for small engines, plus offer to sell a key research project to a competitor.

The conditions were imposed by the European Commission (EC) before it would approve UTC's proposed $18.4 million deal to acquire Goodrich and combine it with traditional competitor Hamilton Sundstrand.

In March, the EC launched an in-depth inquiry of the transaction after becoming concerned that the merged companies would reduce competition in the market for power generation and electronic controls in the small engine sector.

The EC also was concerned that some competing engine suppliers depend on Goodrich for certain components, such as fuel nozzles and engine controls, could lose access to the technologies.

Goodrich and Hamilton Sundstrand are currently the only supplier of engine controls for aircraft engines made by Williams and Honeywell, the EC says. R-R has informed the EC that it will buy Goodrich out of the Aero Engine Controls joint venture, which will restore competitive balance with UTC's new aerospace systems segment comprised of both Hamilton Sundstrand and Goodrich, the EC says.

In addition to the divestments, Goodrich must offer Rolls-Royce the option to acquire a research and development project on lean burn fuel nozzles.