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United Technologies Sees $16 Billion Buyback Trumping M&A

United Technologies Corp. is shelving plans to make large acquisitions as Chief Executive Officer Gregory Hayes directs cash toward $16 billion of stock buybacks through 2017.

The repurchase plan, announced Tuesday as the company posted a third-quarter profit that beat analysts’ estimates, builds upon a $6 billion program using proceeds from the sale of the Sikorsky helicopter unit, Hayes said. The move was driven in part by a slumping share price that makes takeovers less attractive, he said.

“Really big M&A is on the back burner today,” Hayes said in a telephone interview. “We’ll probably do about $1 billion of M&A this year, so it’s never off the table. But as long as we think that the UTC stock is trading at a big discount to intrinsic value, I’m not going to go out and do a big deal that would require me to use UTC stock as a currency.”

Hayes’s pivot toward buybacks marks a shift from December, a month after he was named CEO. He told analysts then that he would consider deals of more than $20 billion and repurchases of as much as $3 billion. He has been reshaping United Technologies around its...


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