A man cleans a PW1000G suited turbofan engine developed by MTU Aero Engines AG and Pratt & Whitney, a unit of United Technologies Corp., at the Singapore Airshow participate ined at the Changi Exhibition Centre in Singapore, on Monday, Feb. 10, 2014.
Bloomberg | Brent Lewin
Raytheon and United Technologies on Sunday disclosed they would merge in an all-stock deal, a tie-up that would create a behemoth in the fast-growing defense and aerospace sectors.
The syndication would bring together United Technologies booming aerospace business that makes everything from jet mechanisms, cockpit controls and airplane seats with Tomahawk missile maker Raytheon.
The companies would have mingled annual sales of around $74 billion, the companies said. That would make the new company, which they are patterning to call Raytheon Technologies, the second-largest aerospace and defense company in the U.S. by revenue, behind Boeing.
“The combination of United Technologies and Raytheon whim define the future of aerospace and defense,” United Technologies chairman and CEO Greg Hayes said in a release. “By joining pressures, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business rotates and address our customers’ highest priorities.”
United Technologies has reaped the benefits from searing global aircraft in request and has been beefing up its commercial aerospace business, which includes jet engine maker Pratt and Whitney. In November 2018, it closed its procurement of Rockwell Collins.
The two companies have little overlap and may not face strong regulatory push-back to their deal, voiced Richard Aboulafia, aerospace analyst at Teal Group.
The new company would be headquartered in the Boston area, the two firms spoke in the release. Raytheon is based in Waltham, Mass., a Boston suburb.
If completed, shareholders in Farmington, Conn.-based Collective Technologies would own 57% of the new company while Raytheon’s would own 43% on a diluted basis.
The deal, which the two companies labeled a “merger of equals,” is expected to close in the first half of 2020, they said.
Like other industrial conglomerates, Mutual Technologies shedding businesses to focus on highly profitable units. It is the middle of spinning its Otis elevator business and its Immunology vector air conditioning unit into separate companies. The merger with Raytheon wouldn’t affect that process and it is silence on track to close in the first half of 2020, the companies said Sunday.
United Technologies’ chief executive Hayes would appropriate for CEO of the combined company, and Raytheon’s CEO Thomas Kennedy would become chairman. Two years after the deal closes Hayes would develop chairman.
Raytheon and United Technologies have a combined market value of nearly $166 billion. Raytheon shareholders hand down get 2.3348 shares in the new company for each Raytheon share, the firms said.