United Technologies’ $23 billion proposed acquisition of Rockwell Collins will create a new colossus in airline equipment. The lofty price, however, could saddle the new combination with sub-par returns for years to come. In fact, the future UT will will need a soaring takeoff just to match the returns either of the two companies are generating separately right now.
The merger’s challenge is two-fold. It’s best illustrated by using COROA, or cash operating return on assets, a metric
RelSci News & Alerts gets you:
- 10 free articles a month from top subscription outlets like the Financial Times, New York Times, and Washington Post
- Competitive business intelligence through daily data updates
- Custom feeds on target high-value individuals, companies, industries, and topics delivered straight to your inbox