article titled "United Technologies reveals plan to split into three" provided with the exam paper and answer the related questions below:

2. Which separation action did United Technology announce? What are the typical strategic objectives of such an action?
4. Speculate about the possible reasons for the 2% increase in United Technology's share price after the announcement was made.

United Technologies, the US manufacturing group, has announced its intention to split into three companies, following calls for a break-up from Daniel Loeb's activist investment fund Third Point.

UTC said on Monday evening it planned to create three new businesses: one in aircraft parts including Pratt & Whitney engines, one as Otis elevators, and one as Carrier heating and air- conditioning systems.

The aerospace business, which will continue to use the United Technologies name, will include Rockwell Collins, newly acquired in a $30bn deal that closed on Monday.

The break-up was revealed ahead of schedule, when the company inadvertently posted on its website a notice of a call for analysts on Tuesday morning to discuss its "intention to separate into three independent companies".

UTC shares, which dropped 0.7 per cent during the trading day on Monday, were up about 2 per cent after-hours.

Over the past five years, UTC's shares have risen by about 11 per cent, well behind the increase in the S&P 500 index of about 45 per cent. Third Point took a stake in the fourth quarter of last year and began pressing for change. It now holds 1.05 per cent of the company's equity.

The break-up decision is the latest in a series of moves by the largest American industrial groups to simplify their structures, including General Electric's plan to concentrate on just two sectors, aviation and power, announced last June. Dow Chemical and DuPont, which merged last year, are similarly splitting up next year into three more focused companies.

Gregory Hayes, UTC's chief executive, said in a statement: "Our decision to separate United Technologies is a pivotal moment in our history

and will best position each independent company to drive sustained growth, lead its industry in innovation and customer focus, and maximise value creation."

The break-up announcement adheres closely to the plan set out earlier this year by Mr Loeb, who proposed a very similar split into three companies. Third Point said in a letter to clients in May that such a separation would "unlock in excess of $20 billion of value, net of separation costs". The fund was also critical of UTC's leadership, complaining of "a well-documented history of poor management execution", particularly in respect to the "botched" ramp-up of Pratt & Whitney's next-generation geared turbofan engine.

However, Mr Hayes had already been floating the possibility of a break-up before Third Point took its stake in UTC. He told analysts in September 2017 that the company planned to look at "different options" to boost the share price, adding: "We're not stuck with the portfolio that we have today, but we're going to look for opportunities to maximise value."

He is set to remain chief executive of the new UTC.

The aviation business will be the largest of the successor companies, with sales of $39bn in 2017. Otis had sales of $12.3bn that year, and the Carrier business, which also includes building automation and security, had sales of $17.8bn.

The separation is expected to come through spin-offs of Otis and Carrier, which would be free of US income tax for shareholders. The break-up is expected to be completed by 2020.

Analysts have speculated that the break-up could lead to further merger and acquisition activity. Joshua Pokrzywinski of Morgan Stanley suggested this month that there was potential for consolidation in the heating and air-conditioning industry, and the constraints appeared to favour combining Carrier with Johnson Controls or Lennox International.

However, Mr Hayes cautioned analysts on a call last month that for both Carrier and Otis, "business combinations are hard to do because of antitrust law.

He added: "When you have market-leading positions like we do . . . it's hard to think about big, big transactions that would pass antitrust scrutiny today."