In a significant step towards the acquisition of the city’s largest employer, Rockwell Collins shareholders overwhelmingly approved of the $30 billion deal.

Ninety-six per cent of voted shares favored acquisition of the Cedar Rapids-based company by United Technologies Corp. of Connecticut.

The approval was expected, but still was a “nice vote of confidence,” said Kelly Ortberg, Rockwell’s chairman, chief executive officer and president.

“This was one of the big conditions of close - the shareowner vote,” he said in an interview. “They voted overwhelmingly in support, so their voice was loudly heard.”

Farmington, Conn.-based UTC plans to buy Rockwell in a $23 billion deal. Including Rockwell’s debt, the acquisition is valued at $30 billion. If completed, Rockwell would combine with UTC Aerospace Systems to form a new division, Collins Aerospace Systems. Ortberg would serve as its chief executive officer.

“We want to thank Rockwell Collins’ leadership, employees and shareowners for their vote of confidence,” UTC said in a statement.

Two shareholders who attended Thursday’s meeting, Keith Erickson and Hugo Kann, said in interviews they understand why Rockwell needs to combine with a larger company.

“I think it was necessary because Boeing is setting up its own shop. They’re hiring 500 engineers to do essentially what Collins sells them,” Kann, 86, said. “I think they almost had to merge with some larger company to keep the business going.”

The acquisition still requires approval by regulators in the United States, the European Union, China and a number of other countries.

Ortberg said he expects those approvals to occur sometime from June through September. The deal’s close would come a few days after those approvals.

INTEGRATION ONGOING

Ortberg repeated his belief Thursday that the acquisition will have a minimal effect on employees in Cedar Rapids and Iowa. Cuts may come to executive-level staff, but manufacturing and engineering jobs should remain largely unchanged, he said.

“I’ve said all along, and nothing changes my view, I think Iowa and Cedar Rapids in particular... will play a prominent role in the future. Exactly what that looks like, we’re still trying to figure that out,” he said.

Cedar Rapids will no longer be the home to Rockwell’s corporate headquarters, as UTC is based in Connecticut, Ortberg noted. The division headquarters for Collins Aerospace still is undecided and Ortberg said he could not provide specifics on how that decision will be made.

“Those decisions are a part of this integration process. I really can’t give you any more feel for how that’s going to go. In fact, the decisions just haven’t been made yet,” he said.

An integration team has been working on how to combine Rockwell with UTC Aerospace.

“That’s a pretty big task because, collectively, we have over 400 different sites, 70,000 employees in over 25 different countries. Putting together this big organisation is a pretty big task and we’re in the middle of that right now,” Ortberg said.

Rockwell Collins is the largest employer in Cedar Rapids, with about 8,000 employees in the city. It has another 1,350 in Eastern Iowa and 30,000 worldwide. UTC Aerospace Systems is based in Charlotte, N.C., and has about 40,000 employees worldwide.

Erickson and Kann, the shareholders, said they don’t think the corporate home for Collins Aerospace will be in Cedar Rapids.

“We feel that since there hasn’t been any movement relative to locating it here, the decision is already made.... The fact that we haven’t (heard anything) is definitive that it’s going to move,” Erickson, 74, said.

Even so, the two said they don’t think the headquarters change would alter much for the city and local employees.

“If they move production, that’s a different story. I don’t think they will, but who knows,” Kann said.

QUICK MEETING

Thursday’s meeting at the Cedar Rapids Marriott, 1200 Collins Road, lasted about 11 minutes. Shareholders have had about a month to submit their votes remotely and only a handful did so in person on Thursday.

If shareholders had not approved the acquisition, Rockwell would have had to pay UTC a $695 million termination fee. Shareholders also approved two other matters, including an advisory vote on acquisition-related executive compensation and an extension of the meeting’s adjournment if not enough votes had been cast in favor of the deal.

Rockwell’s board had recommended shareholders vote in favor of the acquisition.

The Vanguard Group, an investment company, is the largest single shareholder in Rockwell Collins, owning 7.4 per cent of its stock as of Nov. 30. Rockwell’s executives and board of directors own about 1.1 per cent all together, according to Securities and Exchange Commission filings.

The results reported at Thursday’s meeting are preliminary vote counts. The company will report final results after they are certified. Current Rockwell shareholders would own about 7 per cent of UTC’s stock should the deal go through, filings show.

Tribune News Service