UTC Considering Divesting Sikorsky

By By Ernie Stephens, Editor-at-Large | April 2, 2015
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Hartford, Conn.-based United Technologies Corp. (UTC) has appointed an analyst to assess whether or not to divest Sikorsky Aircraft from its family of holdings. The examination is said to be driven by the subsidiary’s positive, but shrinking profit figures in the defense sector.

The assessment, which should be concluded by the end of 2015, is expected to give UTC president and CEO Gregory Hayes the details he needs in order to decide if Sikorsky should be kept in

In spite of brisk sales of the company’s helicopters, including this S-76D demonstrator, Sikorsky’s profits may not be enough to keep UTC from divesting it from its portfolio.
Photo courtesy of Sikorsky

the company’s portfolio as a division, or divested. And if the decision is made to divest it, whether to make Sikorsky a corporate entity unto itself, or to sell it off entirely.

Sikorsky is “just not quite as attractive as the rest of the business,” said Hayes of the division’s $7.5 billion in net sales, which represents only 11.5 percent of UTC’s $65.1 billion income from its other sale activities.

Sikorsky was founded by Igor Sikorsky in 1925, and became part of United Aircraft and Transportation Corp. (later shortened to United Technologies Corp.) in 1929. By 2007, UTC had acquired several smaller companies, including Schweizer, under the Sikorsky name, and drove the division to its current market share of 19 percent. UTC also has a presence in the engine, climate control, fire suppression and elevator sectors.

Business analysts tend to agree that if UTC decides to divest Sikorsky, the more likely result will be restructuring it as a stand-alone company, as opposed to selling it outright. Such a move would put UTC in the best position to avoid the high taxes that would result from its sale, and give the new spin-off its best chance of surviving the split. “We want to make sure they will be a successful stand-alone company,” said Hayes.

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