Aerospace and defense exchange traded funds climbed after Rockwell Collins (NYSE: COL) acquired B/E Aerospace (NasdaqGS: BEAV) to tie together two of the largest suppliers to airlines and plane makers.
On Monday, the iShares U.S. Aerospace & Defense ETF (NYSEArca: ITA) gained 1.1% and SPDR S&P Aerospace & Defense ETF (NYSEArca: XAR) rose 1.3%.
Rockwell Collins agreed to pay $6.4 billion to buy B/E Aerospace in cash and stock, a 22.5% premium to Friday’s closing share price, the Wall Street Journal reports.
COL shares plunged 6.4% on the deal while BEAV shares surged 15.8%.
ITA tracks U.S. companies that manufacture commercial and military aircrafts and other defense equipment, including a 3.5% tilt toward COL and 2.4% to BEAV.
XAR takes a less top heavy approach to component weights and follows a more equal-weight methodology, including a 4.6% position in BEAV and a 4.8% position in COL.
[related_stories]