Nib Ackman, founder and CEO of Pershing Square Capital Management.
Adam Jeffery | CNBC
Activist investor Bill Ackman is swaying United Technologies to abandon its $100 billion stock merger with Raytheon, a source familiar with the essentials confirmed to CNBC.
Ackman, whose Pershing Square Capital Management owned 5.8 million United Technologies divide ups at the end of the first quarter, said in a letter that the tie-up is ill-advised. Ackman had previously encouraged United Technologies to streamline its job by splitting up parts of the conglomerate.
The fund manager sent a letter to United CEO Greg Hayes on Sunday morning comply with a report that the company was in merger talks with Raytheon, the source confirmed to CNBC. Pershing Square vetoed to comment on the letter.
In a statement to CNBC, United Technologies said, “We are confident that our shareholders will see the rights of this transaction and the value it brings to them and the company. We will be working diligently in the days and weeks ahead to change sure that the details of the transaction are presented to and fully understood by all shareholders.”
The Wall Street Journal first reported Ackman’s antithetical.
Shares of both companies were little changed in after-hours trade Tuesday.
On Sunday, Raytheon and United Technologies harbingered they would merge in an all-stock deal to create a new company they plan to call Raytheon Technologies. The performers have combined sales of $74 billion annually. That would make the new company the second-largest aerospace and defense followers in the U.S. by revenue, behind Boeing.
“By joining forces, we will have unsurpassed technology and expanded R&D capabilities that see fit allow us to invest through business cycles and address our customers’ highest priorities,” Hayes, who is set to become CEO of the combined assembly, said in the announcement.
— CNBC’s Leslie Josephs and Christine Wang contributed to this report.