By Ted Mann 

United Technologies Corp. has considered parting ways with the Sikorsky Aircraft helicopter business it has owned for more than eight decades several times in recent years. But there was always a barrier: Louis loved it.

Former Chief Executive Louis Chênevert, who abruptly left United Technologies late last year, wouldn't consider a sale or spinoff of Sikorsky, a person familiar with the matter said. Mr. Chênevert didn't respond to a request for comment.

The helicopter unit makes the iconic Black Hawk for the U.S. military and is a supplier of Marine One, the chopper that carries the president.

Now, new CEO Greg Hayes is reversing course, under pressure to streamline the conglomerate's portfolio and with challenges building for the helicopter business. Sikorsky's big markets include the U.S. military and the oil business, both under stress as wars wind down and crude prices have tumbled. Mr. Hayes will make a decision on whether to spin off the unit by June and try to complete a transaction by the end of the year.

"They didn't fit the growth profile that we're looking for to set us apart for the next decade," Mr. Hayes said Thursday. The business is growing too slowly and is overly dependent on Defense Department contracts, he said. Mr. Hayes acknowledged his predecessor's devotion to Sikorsky. "Louis believed it to be an iconic asset," he said.

In the first two months of this year, United Technologies approached a few companies about acquiring Sikorsky, Mr. Hayes said, but it quickly became clear that taxes would prove an obstacle to making a sale. The low tax basis of the helicopter company, which United Technologies' predecessor acquired in 1929, would have meant securing an unreasonably high price from a buyer in order to overcome the tax bill, he said.

Global military helicopter sales are forecast to fall to EUR10 billion, or about $10.6 billion, in 2019 from EUR15 billion last year, according to IHS Jane's. The consultancy estimates the civilian helicopter market could expand by a third to about EUR8 billion in four years, but the forecast is tempered by the prospect of falling sales to oil-and-gas industry users.

United Technologies is already bracing for years of depressed profit margins in its other marquee aviation business, engine maker Pratt & Whitney, which is still absorbing research and manufacturing costs associated with a new family of commercial airplane engines as it ramps up production.

Morgan Stanley analyst Nigel Coe said in a note to clients that the contemplation of a significant alternation to the company's portfolio "shouts action and change" to investors hungry for some of both.

Sikorsky, which had sales of $7.5 billion last year, is the global market leader in military helicopter sales alongside Boeing Co. and Airbus Group NV. Shipments were flat last year. Sikorsky shipped 178 helicopters for military platforms in 2014, little changed from 177 a year earlier. Commercial shipments fell to 59 from 63.

The outlook for the company has improved, however, thanks to a clean sweep of big Pentagon awards and the resolution of a contract dispute with the Canadian military.

Winning the rescue helicopter contract for the Air Force and one for a new presidential helicopter fleet, both in partnership with Lockheed Martin Corp., have lifted its U.S. military backlog to around $40 billion. The company has also made strides in the export market, securing a big deal with Turkey last year and is among the contenders for Poland's coming military helicopter deal.

Sikorsky estimates its military sales will grow by 5% to 7% this year from 2014, with commercial business rising by 3% to 5%.

Analysts who have been chewing over a potential disposal of Sikorsky for months put an enterprise value of between $8 billion and $9.5 billion on the business, which would translate to an equity value of around $5.6 billion if United Technologies opts for a tax-free spinoff and loads Sikorsky up with debt to pay a dividend back to its parent on its way out the door, RBC Capital estimated.

If United Technologies opts for a sale, private-equity buyers have started to reappear in the defense sector after five or more years of muted activity. Trade buyers such as Boeing or even a combination with the Bell unit of Textron Inc. are viewed as less likely.

Some analysts have said a spinoff makes more sense than a sale, which could trigger a major tax bill for United Technologies. The parent company has owned Sikorsky since 1929, shortly after Igor Sikorsky moved his aircraft manufacturing business to Stratford, Conn., from Long Island.

Doug Cameron contributed to this article.

Write to Ted Mann at ted.mann@wsj.com and Doug Cameron at doug.cameron@wsj.com

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