Publications
Publications
- November 2019
- HBS Case Collection
United Technologies Corp.: Are the Parts Worth More Than the Whole?
By: Benjamin C. Esty and Daniel Fisher
Abstract
After spending more than 50 years creating a diversified industrial conglomerate that Fortune Magazine described as “arguably the most profitable conglomerate in America” in 2014, UTC’s CEO Greg Hayes was under pressure from activist investors (Dan Loeb and Bill Ackman) to break the company into three standalone businesses in the spring of 2018. The activists claimed that a breakup would create at least $20 billion of incremental value (on top of a current market value of approximately $100 billion) and possibly a lot more. Hayes must decide whether a breakup makes sense—will it create value and, if so, how much value and why? What factors determine whether a conglomerate trades at a discount or a premium, and how big are those discounts and premiums likely to be?
Keywords
Corporate Strategy; Business Conglomerates; Financial Management; Corporate Governance; Organizational Structure; Diversification; Valuation; Investment Activism; Financial Strategy; Investment Funds; Value Creation; Aerospace Industry; Electronics Industry; Industrial Products Industry; United States
Citation
Esty, Benjamin C., and Daniel Fisher. "United Technologies Corp.: Are the Parts Worth More Than the Whole?" Harvard Business School Spreadsheet Supplement 220-714, November 2019.