(Reuters) – Aerospace provider United Technologies Corp (UTX.N) has struck a $30 billion agreement to purchase avionics and interiors manufacturer Rockwell Collins Inc (COL.N), the companies said on Monday, in a deal that bulks up UTC’s electricity with plane makers by creating one of the world’s largest makers of civilian and defense aircraft components. Farmington, Connecticut-based United Technologies will pay $140 per share for Rockwell Collins, divide between $93.33 per in cash and $46.67 in stock, according to the companies. The cost represents a 17.6 percent premium to Rockwell’s $119 share price before news of the talks emerged on Aug. 4. Shares of Cedar Rapids, Iowa-based Rockwell Collins closed at $130.61 on Friday. U.S. markets were closed on Monday for the Labor Day holiday. The acquisition cost implies a trade value of $30 billion, including Rockwell Collins’ debt, and a total equity value of $23 billion. United Tech said it plans to fund the cash portion through cash and debt issuances on hand. Under the agreement, the companies said that Rockwell Collins and UTC’s aerospace systems segment will be combined to create a new business unit called Collins Aerospace Systems. “This acquisition adds enormous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems,” UTC’s chairman and chief executive officer, Greg Hayes, said in the statement. “Together, Rockwell Collins and UTC Aerospace Systems will enhance customer value in a rapidly evolving aerospace sector by making aircraft more intelligent and more connected,” he said. SUPPLIERS VS PLANEMAKERS The creation of a new giant in the top echelon of aircraft components makers comes as planemakers Boeing Co (BA.N) and Airbus SE (AIR.PA) are attempting to capture more of the profits earned by their own suppliers. Both are pushing suppliers to lower prices and are moving into the aftermarket arena for services and parts that suppliers now enjoy. In a move seen as a threat to Rockwell, Boeing said that it would build its own avionics business up. Airbus urged provider UTC to stay focused on fixing industrial problems that have delayed aircraft deliveries, last week. If plane makers “are likely to take more of this aftermarket or demand more of the aftermarket, we are going to have to think about how we price our products,” Hayes told analysts in July. By making more of these components needed on each aircraft, analysts say, United Technologies probably will get some leverage to withstand such pressures. The deal follows a wave of consolidation among smaller aerospace manufacturers in recent years that was caused in part by the need to invest in new technologies like metal 3-D printing and factories that are connected to stay competitive. A combined United Technologies and Rockwell Collins could similarly invest, and their portfolios have little overlap. United Technologies makes Pratt & Whitney jet engines used by Airbus, Bombardier Inc (BBDb.TO), Embraer SA (EMBR3.SA) and other plane makers. It supplies engines for Lockheed Martin Corp’s (LMT.N) F-35 Joint Strike Fighter. Additionally, it supplies such key components as landing engine covers and gear, ac systems . Rockwell Collins is a significant avionics supplier to Boeing and Airbus as well as plane makers. In April it added passenger seating, cabin interiors, lavatories and galleys through its $6.4 billion purchase of B/E Aerospace. Both companies have spent a month trying to reach an agreement, and their sales would be more than $62 billion, compared with about $95 billion for Boeing. United Technologies expects to close the purchase. The organization, with a $94.2 billion market value, also owns Otis Elevator and air conditioner maker Carrier. Rockwell Collins has a market value of $21.2 billion. The deal, which includes $7 billion in Rockwell’s debt, is expected to save more than $500 million by the fourth year after its completion, the companies said. Morgan Stanley & Co LLC was the advisor to United Tech, and Wachtell, Lipton, Rosen & Katz was its legal advisor. J.P. Morgan Securities LLC and Citigroup Global Markets Inc were Rockwell’s financial advisers, while Skadden, Arps, Slate, Meagher & Flom was its legal adviser. Reporting by Alwyn Scott and Mike Stone; Chuck Mikolajczak in New York and Additional reporting by Michael Flaherty and Yashaswini Swamynathan in Bengaluru; Editing by Leslie AdlerOur Standards:The Thomson Reuters Trust Principles.