United Technologies to Divest Asset - Analyst Blog
December 26 2012 - 3:10AM
Zacks
United Technologies
Corp. (UTX) recently announced that it has entered into an
agreement to divest its UTC Power fuel cells unit to ClearEdge
Power - manufacturer of proton exchange membrane (PEM) fuel cells -
located in Hillsboro, Oregon. The deal is accepted to close in
early 2013; however, financial terms of the agreement were not
disclosed. This acquisition is expected to help ClearEdge to
strengthen its position as a leading provider of cost effective
distributed Power solutions.
Earlier, in December 2012, United Technologies announced the
signing of an agreement to divest its Pratt & Whitney Power
Systems unit, which is currently a part of Pratt & Whitney, to
Mitsubishi Heavy Industries (MHI) . With this
divestiture of Power Systems Unit, United Technologies intends to
better focus on its aerospace and commercial businesses.
United Technologies is focusing on strengthening its balance sheet.
Besides improving the quality of its portfolio, United Technologies
intends to increase its liquidity by selling assets that no longer
fit within the company’s strategy. At the end of third quarter
2012, cash and cash equivalents of the company stood at $6.2
billion. Further, now through this transaction, United Technologies
seeks to reposition its portfolio and primarily focus on aerospace
and building systems.
United Technologies provides high-end technology products and
services to the building systems and aerospace industries
worldwide. The company is a diversified business conglomerate
serving various end markets such as aerospace, defense and
commercial construction, which move according to their own cycles.
Therefore, this mixture and diversification allows the company to
remain profitable even during tough economic times.
United Technologies currently has a Zacks #3 Rank, which translates
into a short-term Hold rating. We also have a long-term Neutral
recommendation on the stock. One of its competitors,
General Electric Company (GE) holds a Zacks #4
Rank, which translates into a short-term Sell rating.
GENL ELECTRIC (GE): Free Stock Analysis Report
(MHI): ETF Research Reports
UTD TECHS CORP (UTX): Free Stock Analysis Report
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