US-based aerospace group United Technologies (UTC) has reached a definitive agreement to purchase aircraft parts manufacturer Rockwell Collins for $30bn, which includes the acquisition of $7bn debt.

UTC is set to pay $140 per share in cash and stock as part of the agreement.

Rockwell shareholders are expected to receive $93.33 per share in cash and the remaining $46.67 in UTC stock.

The cash portion of the deal is anticipated to be financed by debt issuances and cash on hand with UTC.

The transaction is subject to approval from Rockwell Collins’ shareowners and other customary closing conditions, and is due to be closed by the third quarter of next year.

UTC chairman and CEO Greg Hayes said: “This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems.

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"Together, Rockwell Collins and UTC Aerospace Systems will enhance customer value in a rapidly evolving aerospace industry by making aircraft more intelligent and more connected."

“Together, Rockwell Collins and UTC Aerospace Systems will enhance customer value in a rapidly evolving aerospace industry by making aircraft more intelligent and more connected.”

“The integrated companies’ expertise in developing electrical, mechanical and software solutions will allow us to deliver more innovative products and services and provide greater value to our customers and shareowners.”

Rockwell Collins and UTC’s aerospace divisions will be combined to create a new business unit named Collins Aerospace Systems following the finalisation of the arrangement.

UTC expects to save more than $500m in run-rate pre-tax cost synergies by the fourth year of the completed deal.

Rockwell Collins currently provides aviation and high-integrity solutions for commercial and military customers, including flight controls, aircraft interior, data connectivity and other solutions.