UTC CEO: Separation slated for mid-2020

By Marjorie Censer / January 23, 2019 at 8:31 PM

United Technologies' planned split into three companies is likely to take about 18 months, the company's chief executive said today.

During an earnings call with analysts, Greg Hayes said the company has about 330 people working to separate the company into three parts. That number is slated to grow to 500 people.

UTC announced in November it plans to separate its Otis and Carrier businesses. The remaining United Technologies will be comprised of Collins Aerospace Systems and Pratt & Whitney.

"We now see a path to achieve the separation in no more than about 18 months," Hayes said today. "Unfortunately, the ultimate timing of the spin will be subject to tax rulings."

"It plays out to around May or so of 2020 to be complete," he added. "Obviously, we're pushing to get it done a lot faster."

Hayes said the company is expecting $2.5 billion to $3 billion in costs associated with the separation. About $2 billion would be associated with tax costs, while another $500 million is anticipated transaction costs, including the people working on the deal. Hayes said the company currently expects another $300 million in costs related to debt refinancing.

Hayes also noted the remaining UTC will have to make significant cuts to its corporate costs.

"About 40 percent of UTC's current revenue goes away, meaning that we're going to have to be . . . taking reductions along those lines here at the corporate office as well," he said.