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
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