United Technologies plans 75% debt in $18.4 billion Goodrich purchase

By Aleesia Forni

Columbus, Ohio, Sept. 22 - United Technologies Corp. intends to fund its $18.4 billion acquisition cost of Goodrich Corp. with a combination of debt and equity.

The company plans to raise 75% of the funding with a debt offering and 25% with equity.

"Obviously with the equity markets weak like they are today and have been for the last couple of months, the focus right now is on the debt markets, but we recognize that we will have to issue equity probably prior to close," chief financial officer Greg Hayes said during the company's acquisition announcement conference call.

The company aims to maintain its credit rating during the transaction.

In order to do so, the company will suspend share buybacks through 2012, as well as significantly reduce the program in 2013 and 2014, "probably cutting it in half to about $1 billion per year," Hayes said.

"Without the burden of share sbuyback at the first of the year or so, we'll be able to pay this debt down relatively quickly," Hayes said.

The company will also reduce its mergers and acquisitions placeholder, typically at $2 billion per year, to roughly $1 billion.

"Keeping our credit rating, especially in times like this, it is sacrosanct," Hayes said

The company expects the transaction to close in either the second or third quarter of fiscal 2012.

United Technologies is a Hartford, Conn.-based provider of high-technology products and services for the aerospace and building industries.

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