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Industrial conglomerate United Technologies Corp. reached a deal to buy airplane-parts maker Rockwell Collins Inc. for $23 billion, in the biggest aerospace deal in history.

Both companies' boards have approved a deal in which United Technologies will pay $140 a share in cash and stock, the companies said late Monday. Rockwell investors will get $93.33 a share in cash and the remaining $46.67 in United Technologies stock.

The price is an 18% premium to where Rockwell traded before word of a potential deal first surfaced early last month, and 30% above where the stock ended July.

The deal would be the biggest aerospace deal ever, followed by United Technologies' 2012 acquisition of Goodrich Corp. for about $16.5 billion, according to Dealogic.

It promises to reshape the market for aerospace parts and could be a harbinger of a breakup of United Technologies in the years following integration, according to people familiar with the company's plans.

Rockwell is expected to give United Technologies a larger presence, and more leverage, in its business supplying Boeing Co. and Airbus SE as the aerospace industry ramps up for a new generation of jets. Those new jet plans are likely to be worth decades of business for the component makers such as United Technologies and Rockwell.

Farmington, Conn.-based United Technologies already owns one of the world's biggest jet-engine makers, Pratt & Whitney, and an aerospace division that also makes parts such as wheels and landing gear.

Rockwell specializes in cockpit displays and communications systems for passenger jets and the military. In April, the Cedar Rapids, Iowa, company closed its roughly $6 billion acquisition of B/E Aerospace Inc., a maker of plane seats and interiors.

United Technologies Chief Executive Greg Hayes will remain as CEO of the combined company, and Rockwell chief Kelly Ortberg will run a new business known as Collins Aerospace that will combine the parts businesses, the companies said.

The increased focus on aerospace for United Technologies could trigger further portfolio changes, the people said. The company also makes Carrier air conditioners and Otis elevators and is open to reviewing whether to break up in the coming years after the company pares its debt levels and squeezes out some $500 million in expected cost savings, the people said. There isn't a decision on whether any split will happen, they cautioned.

The cost savings are expected to come from eliminating the expenses of being a public company for Rockwell and duplicative sales expenses, but aren't expected to mean significant workforce cuts, the people said.

Mr. Hayes has proved willing to make large changes in the past. He took over as CEO in November 2014 and by July 2015 had reached a deal to sell the company's Sikorsky helicopter division.

Several Wall Street analysts have said the deal makes more sense if it provides a path to splintering the conglomerate.

Last year, United Technologies' aerospace and jet-engine businesses had about $29.4 billion in revenue, while its other businesses brought in about $28.7 billion.

Rockwell Collins had sales of about $5.3 billion in the fiscal year ended in September. B/E Aerospace added another $2.9 billion.

As reports of the merger talks became public, financial analysts have said they don't expect significant antitrust issues, given that United Technologies and Rockwell make different airplane parts.

Aside from regulators, the companies may have to sell the deal to their customers, where there has been tension already.

Pratt & Whitney has struggled with production and the reliability of its new geared-turbofan jet engine that powers Airbus A320neo single-aisle planes. Airbus plane deliveries this year are running behind because of a dearth of engines.

Regarding a potential Rockwell deal, an Airbus spokesman recently said the airplane maker hoped "that any potential M&A would not distract [United Technologies] from their top operational priority."

United Technologies officials have said they expect the problems to be resolved this year and were expecting to meet engine delivery commitments.

While United Technologies has long eyed Rockwell, talks first began between the CEOs in May, according to some of the people familiar with the matter. While the companies don't see major hurdles to closing the deal, they don't expect the airplane makers to be happy with the combination and plan to start making their case for why it would be beneficial starting Tuesday, the people said.

Boeing and Airbus have also been nudging their way into the aftermarket business to capture some of the profit from selling and servicing parts -- putting them on a collision course with suppliers such as United Technologies.