United Technologies will split into 3 companies, each with a sharper focus

United Technologies plans to split into three companies, announced Monday the industrial giant. The split, to be completed by 2020, marks the shift from the kitchen sink approach to industrial manufacturing to profitability by specializing in one business line.

One of the entities will be called United Technologies, which specializes in aerospace and combines the company's Collins Aerospace Systems and Pratt & Whitney units. Otis, which will manufacture elevators and escalators, and the third, Carrier, producing heating and cooling equipment, among other products.

"Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth," said Gregory J. Hayes, President and Chief Executive Officer, in a statement.

Last week, Chinese regulators approved the purchase by Rockwell Collins, a $ 30 billion aircraft parts manufacturer, which gave the final green light to the deal signed last year.

With this acquisition, the company added the scale needed to create a stand-alone company in aerospace systems, analysts said.

Founded in 1934, United Technologies has spent decades becoming larger and, over the years, enriching many shareholders.

But in recent years, the company "has struggled to make the conglomerate model produce the same kind of financial results," said Carter Copeland, an analyst at Melius Research, citing stagnant earnings per share growth. "The separation allows them to focus on what each business needs to do to succeed alone."

After all, said Mr. Copeland, the production of aircraft engines requires a strategy different from that of the manufacture of air conditioners. The aerospace industry applies over a 10-year period, while cooling equipment requires shorter-term prospects.

The company had reviewed its activities and committed to making a decision before the end of the year.

Mr. Hayes, for his part, had hinted that he wanted to split his conglomerate by $ 103 billion.

At a Fortune conference in September, Hayes said the board and investors have asked, "Will these companies be better as a conglomerate of United Technologies, or better as a stand-alone, focused company?", He said. added. : Concentration ultimately leads to success. "