Economy

Raytheon and United Technologies Merge To Create A New Aerospace Giant

Raytheon and United Technologies Merge To Create A New Aerospace Giant”

The United-Raytheon deal is expected to close in early 2020, after United's non-aerospace businesses take flight, Reuters reported.

"It's hard to negotiate when you have two companies and sometimes you get one bid", Trump said.

Raytheon, which generated 68 percent of its 2018 revenue from the USA government, is seeking to spread risks over a more diversified collection of businesses and customers, reducing its reliance on defense contracts. Trump asked. "It becomes one, big, fat, lovely company, but I have to negotiate - meaning the United States has to buy things".

Later, Trump said he hoped the merger could go forward, but reiterated his concern. "That would be the thing that bothers me most".

The new company, to be called Raytheon Technologies, which will make Tomahawk missiles, the F-35 fighter jet and space suits for astronauts among other items, would have sales of about $74bn in 2019. Following the merger completion, the combined company intends to spend more than $8 billion in research and development projects.

Hayes and Raytheon CEO Thomas Kennedy (who would serve as executive chairman for two years after the deal closes) didn't elaborate on how the merger will affect MA, where Waltham-based Raytheon has 13,000 employees, or CT, where United Technologies employees 19,000 at its Farmington headquarters and other locations in the state. That would top giants like Lockheed Martin Corp. and Northrop Grumman Corp.

A model of the Patriot anti-missile system is seen at Raytheon's exhibition center at the Farnborough aerospace show, in Farnborough, U.K.in 2008. UTC makes jet engines, including those produced by its Pratt & Whitney and Collins Aerospace subsidaries.

Raytheon Technologies will focus on hypersonics - vehicles or weapons which can fly faster than the speed of sound - as well as intelligence and surveillance systems, artificial intelligence for commercial aviation and cybersecurity for connected planes. He added that both companies are "great" but said he anxious that the merger would "take away more competition". Since it would still leave the Defense Department with five big suppliers - and there is little overlap between Raytheon's and United Technologies' operations - it probably will not attract significant government resistance.

United Technologies operates United Technologies Electronic Controls in Huntington, which had employed more than 700 production employees before the parent company moved those jobs to Mexico in 2017 and 2018.

In Northrop Grumman's purchase of Orbital ATK a year ago, the FTC noted in a statement accompanying the approval that it worked closely with the Defense Department on the review, and had the department appoint someone to oversee compliance of the consent decree.

Raytheon chief Tom Kennedy will be its executive chairman.

Greater heft would enhance the ability of United Technologies to withstand cost pressures from customers such as Boeing Co. and Airbus SE, said Rothacker, the Bloomberg analyst. Another crucial customer is the U.S. Department of Defense.



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