Raytheon and United Technologies agree to all-stock merger that would create aerospace behemoth
cnbc.com
The combination would bring United Technologies’ aerospace business together with defense contractor Raytheon.
The deal is expected to close in the first half of 2020.
With combined annual sales of around $74 billion the new company would be the second-largest defense-and-aerospace company in the U.S. after Boeing.
“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” United Technologies chairman and CEO Greg Hayes said in a release. “By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers’ highest priorities.”
United Technologies has reaped the benefits from searing global aircraft demand and has been beefing up its commercial aerospace business, which includes jet engine maker Pratt and Whitney. In November 2018, it closed its acquisition of Rockwell Collins.
The two companies have little overlap and may not face strong regulatory push-back to their deal, said Richard Aboulafia, aerospace analyst at Teal Group.
The new company would be headquartered in the Boston area, the two firms said in the release. Raytheon is based in Waltham, Mass., a Boston suburb.
If completed, shareholders in Farmington, Conn.-based United Technologies would own 57% of the new company while Raytheon’s would own 43% on a diluted basis.
The deal, which the two companies called a “merger of equals,” is expected to close in the first half of 2020, they said. |
