Raytheon and United Technologies Merge To Create A New Aerospace Giant

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Raytheon and United Technologies are merging, in what they describe as a union of equals.

Jim Watson/AFP/Getty Images

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Jim Watson/AFP/Getty Images

Raytheon and United Technologies are merging, in what they describe as a union of equals.

Jim Watson/AFP/Getty Images

The Raytheon Company and United Technologies Corporation are merging, in an all-stock deal that the two companies say is a merger of equals. The new company’s name will be Raytheon Technologies Corporation — and it’s expected to have nearly $74 billion in annual sales.

The new defense and aerospace company would be second only to Boeing in the U.S., according to the most recent Forbes 500 rankings. In that list of annual revenues, Boeing leads the way with more than $101 billion. Another rival, Lockheed Martin, had $53.7 billion in revenues, according to Forbes.

“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 statement about the deal.

Hayes is set to become the leader of the new company: He’ll take the titles of chairman and CEO two years after the merger is finalized.

Under the deal, United Technologies’ shareholders will own around 57 percent and Raytheon shareholders will own about 43 percent of the merged company. Both Raytheon’s and United’s board of directors have unanimously approved the merger, which is expected to close during the first half of 2020.

The headquarters of Raytheon Technologies will be in the Boston metro area, the companies say. Raytheon is currently based in Waltham, Mass., while United is based in Farmington, Connecticut.

The deal brings together two companies that have been intertwined with America’s technological explosion of the past nearly 100 years. United’s list of accomplishments range from transmitting the first photo via satellite to receiving the first GPS signal. Raytheon engineers invented both the microwave oven and the Patriot missile. It also includes the trailblazing legacy of Hughes Aircraft, which it acquired in 1997.

“Raytheon Technologies will continue a legacy of innovation with an expanded aerospace and defense portfolio supported by the world’s most dedicated workforce,” said Tom Kennedy, Raytheon’s current chairman and CEO. He’ll be the new company’s executive chairman.

The merger is subject to approval by government regulators, as well as by the two companies’ shareholders. But the pair have already unveiled a website touting their merger.

Under the deal, the new Raytheon will consolidate its operations into four businesses: one based on intelligence and aerospace, and another based on defense and missile systems. Those entities will join Collins Aerospace (the recently acquired Rockwell Collins Inc.) and jet engine maker Pratt Whitney — two of United’s high-revenue divisions.

“By joining forces, we will have unsurpassed technology and expanded RD capabilities,” Hayes said. “Merging our portfolios will also deliver cost and revenue synergies that will create long-term value for our customers and shareowners.”

By the time the deal closes, United Technologies is expected to have finished spinning off its Otis and Carrier businesses — a move that was announced previously, as part of a focus on aerospace and engines.

Article source: https://www.npr.org/2019/06/10/731225619/raytheon-and-united-technologies-merge-to-create-a-new-aerospace-giant?utm_medium=RSS&utm_campaign=news

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