Raytheon And United Technologies Agree To Massive Merger

Raytheon And United Technologies Agree To Massive Merger”

United Technologies, a $116 billion engineering conglomerate, and Raytheon, a $53 billion defence contractor, said on Sunday that they had agreed a merger of equals, one of the largest deals in the defence industry.

The deal may also be scrutinized by the Pentagon, and perhaps Congress.

Meanwhile United Technologies two main businesses are engine maker Pratt & Whitney and Collins Aerospace, which manufactures equipment for commercial, regional and military aircraft such as seats, landing gears and sensors.

The companies will have combined debt of about $26 billion when the deal closes, with about $24 billion of that coming from United Technologies, the companies said in their statement.

"I want to see that we don't hurt our competition", he said in an interview with CNBC.

"I remain increasingly concerned about the rapid consolidating within defense and aerospace industry and the impact on competition", Murphy said. "It's no good", Trump said.

Hayes will hold the CEO job in the combined organization, while Raytheon CEO Thomas Kennedy will become the executive chairman.

UTC's Pratt & Whitney division builds the F135 engine for the F-35 Joint Strike Fighter; the F119 turbofan for the F-22 fighter; the F100 and its variants for the F-15 and F-16; the F117 engine that powers the C-17 airlifter, and a number of powerplants for civil airliners, business jets, and helicopters. In September 2017, the company revealed intentions to acquire Rockwell Collins. This resulted in the deal closing in November 2018, as opposed to the targeted third quarter. In two years, Hayes will rise to the role of chairman and CEO, the company said.

"We look forward to working with Raytheon Technologies Corp, to provide the best capabilities our warfighters deserve, as the greatest value to the taxpayer".

The companies said that they expected a number of benefits to follow from the merger in the near and long term, with more than $1bn dollars of annual cost synergies by the fourth year, new revenue opportunities, and a capital return to shareholders of between $18bn and $20bn in the first 3 years.

The headquarters of Raytheon Technologies will be in the Boston metro area, the companies say. Tom Kennedy will be appointed Executive Chairman and Greg Hayes will be named CEO of Raytheon Technologies. When the dust settles, shareholders of United Technologies will own approximately 57% of the new firm on a fully diluted basis while Raytheon's will own approximately 43%.

However, the combination excludes Otis and Carrier - which are expected to be separate from United Technologies in the first half of 2020 as announced previously.

In an Australian context, Raytheon supplies sensors, effectors, electronic warfare and mission systems to various Australian Defence Force platforms.

However, Pentagon spending is projected to slow down after an initial boost under Trump. Raytheon is now based in Waltham, Mass., while United is based in Farmington, Connecticut. And Wachtell, Lipton, Rosen & Katz is serving as legal advisor to United Technologies. And Raythen and United have a combined annual company and customer funded R&D spend of about $8 billion, 7 technology Centers of Excellence, and over 60,000 engineers.

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