Defense contractor Raytheon and aerospace giant United Technologies have agreed to an all-stock merger recently that will create the second largest aerospace company in the world.
Raytheon and United Technologies announced their plans to merge into Raytheon Technologies Corporation, which would become the second largest aerospace company in the world after Boeing, with annual sales expected in the neighborhood of $74 billion. The merger will not include Carrier and Otis, currently units of United Technologies but in the process of being spun-off by the first half of 2020.
“The combined company, which will be named Raytheon Technologies Corporation, will offer expanded technology and R&D capabilities to deliver innovative and cost-effective solutions aligned with customer priorities and the national defense strategies of the U.S. and its allies and friends,” a joint statement from the two companies read.
Approved unanimously by the boards of both companies, United Technologies shareholders will own about 57 per cent of the new company, with Raytheon shareholders owning the remaining ~43 per cent. The merger is expected to be completed in the first half of 2020, once Carrier and Otis are successfully separated from United Technologies.
“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Greg Hayes, Chairman and CEO of United Technologies. “Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution. 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. Merging our portfolios will also deliver cost and revenue synergies that will create long-term value for our customers and shareowners.”
