Some conglomerates manage to grow through organic efforts, and sometimes they grow through acquisitions. United Technologies Corp. (NYSE: UTX) reportedly has been in talks to acquire Rockwell Collins Inc. (NYSE: COL). While the reports so far indicate that the two aerospace suppliers have not reached an agreement on price, perhaps the more important question is what it would mean for the likes of UTC and its shareholders.

The current reports from CNBC, Dow Jones and Reuters suggest that the merger would be valued above $20 billion, citing the all too familiar “according to people familiar with the matter.”

The reported price of less than $140 per share Rockwell share took Rockwell Collins up to a market cap of $20.5 billion, and it generated a 6% share gain to $126.50.

It is worth noting that acquiring Rockwell Collins would really end up being a two-in-one acquisition. The aerospace supplier recently closed on its own $6 billion or so acquisition of B/E Aerospace just in April.

UTC is no stranger to potential mergers. Its management has indicated that the company is seeking acquisitions, and in early 2016 it was widely discussed that Honeywell International Inc. (NYSE: HON) had held unsuccessful merger discussions with UTC. What matters here is that a $20 billion deal for Rockwell Collins is probably “doable” for regulators when it comes to size and scale. At the current time, UTC has a market cap of $94 billion, versus a $105 billion value for Honeywell.

An acquisition of Rockwell Collins would increase the amount of supplying aerospace products, systems and services to the likes of Boeing and its rivals such as Airbus. With a whole new generation of jets coming on strong, there could be higher business opportunities for a couple more decades without even considering what new opportunities would  come up for growth between now and then.

As a reminder, Boeing said with its earnings in July that its total backlog of orders was now up to $482 billion. And of that total backlog, Boeing noted that this was more than 5,700 airplanes valued at $424 billion. Boeing’s backlog for its Defense, Space & Security business was shown to be $58 billion, and 37% of that represented orders from international customers.

UTC gave its own guidance for fiscal year 2017 of $6.30 to $6.60 in earnings per share outside of non-recurring items, and it gave guidance for revenues to be up 1% to 3% (2% to 4% organic) to be $57.5 billion to $59.0 billion.

UTC’s Pratt & Whitney is already one of the world’s top jet engine makers, and an aerospace parts company making wheels and landing gears could be getting more offerings if it acquired Rockwell Collins. UTC also has UTC Climate, Controls & Security, for fire safety, security, building automation, heating, ventilation, air conditioning and refrigeration systems and services promote safer, smarter and sustainable buildings. Its Otis unit makes elevators, escalators and moving walkways.

Rockwell is a key maker of airplane cockpit displays and communications systems, and the B/E Aerospace acquisition gave Rockwell a key position in supplying the plane seats and the interiors for planes. The company also has operations in rail and critical infrastructure.

Rockwell already had $5.26 billion in 2016 revenue, and B/E’s full year revenues in 2016 of $2.9 billion was a gain of more than 7% from 2015.  Rockwell Collins reported its earnings at the end of July, and its guidance for the combined operations was for sales of $6.8 billion and adjusted earnings of about $5.95 to $6.15 per share.

The long and short of the matter is that a combined UTC and Rockwell Collins would be an interesting tie up. It would make United Technologies a much stronger player in aerospace, defense and in other operations. There is even a chance this might be a case of outside pressure leading to unit sales of some non-core operations ahead.

Some mergers make less sense than others. This one of those potential mergers that looks great on paper. Now it just boils down to whether the price is right and making sure regulators in the United States and other jurisdictions won’t block it.

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