UTC is signaling to China to buy Rockwell Collins

(Reuters) – United Technologies Corp (UTX.N) received Friday the approval of Chinese authorities for its $ 30 billion purchase of rockwell aircraft parts manufacturer Collins Inc (COL.N), eliminating the last obstacle to the conclusion of the largest aerospace agreement in history.

The conditional approval of the agreement between the two US industrial heavyweights comes during a period of rising trade tensions between China and the United States.

The dispute between the world's two largest economies has raised concern among UTC's shareholders that the merger may be subject to growing tension.

UTC said Friday that the deal should be finalized within three business days. Last month, the company had already expressed confidence in getting China's approval for the deal.

China is asking UTC and Rockwell to divest certain assets, and regulators have also specified requirements for the supply of aircraft components to the country, said a statement from the China Market Regulatory Administration. The market regulator oversees anti-monopoly issues.

Connecticut-based UTC, which manufactures Pratt & Whitney jet engines, Otis elevators and various aircraft components, hopes Rockwell will give it more weight against aircraft manufacturers, who are negotiating price cuts. Boeing (PROHIBIT), Airbus (AIR.PA) and Bombardier (BBDb.TO).

Meanwhile, other major US mergers have encountered difficulties with Chinese regulators in the context of the trade dispute, the latest being that of Qualcomm Inc. (QCOM.O) failed when an attempt was made to purchase NXP Semiconductors NV (NXPI.O).

Nevertheless, China has given this week an unconditional approval to Walt Disney Co (DIS.N) A € 71.3 billion contract for the purchase of Twenty-First Century Fox (FOXA.O) entertainment assets.

UTC, under pressure from activist investors to split, said last month that it was considering options, including an entertaining interest from third parties to buy any of its activities.

Rockwell Collins shares jumped by about 9% in morning trading in New York, while UTC shares rose about 2%.