Raytheon, United Technologies Corp. Enter into Agreement to Combine in All-Stock Merger of Equals

Raytheon and United Technologies Corp. (UTC) announced that the companies have entered into an agreement to combine in an all-stock merger of equals.

The deal will see United Technologies, a leading manufacturer of aerospace components, merge with Raytheon, a leading defense company which manufactures missile systems and radars, to create a aerospace and defense technology behemoth, to be named Raytheon Technologies Corporation. The combined company will have approximately $74 billion in pro forma 2019 sales.

“The transaction will create a premier systems provider with advanced technologies to address rapidly growing segments within aerospace and defense”, said a statement announcing the merger.

The merger will include United Technologies’ divisions – Collins Aerospace, which was formed following the acquisition of Rockwell Collins in 2018, and Pratt & Whitney, a leading manufacturer of aircraft engines, but will exclude Otis and Carrier which manufactures elevators and HVACs respectively. Otis and Carrier will be spun off from United Technologies in the first half of 2020 as previously announced.

Under the terms of the agreement, which was unanimously approved by the Boards of Directors of both companies, Raytheon shareowners will receive 2.3348 shares in the combined company for each Raytheon share. Upon completion of the merger, United Technologies shareowners will own approximately 57 percent and Raytheon shareowners will own approximately 43 percent of the combined company on a fully diluted basis. The merger is expected to close in the first half of 2020, following completion by United Technologies of the previously announced separation of its Otis and Carrier businesses.

“The timing of the separation of Otis and Carrier is not expected to be affected by the proposed merger and remains on track for completion in the first half of 2020”, said the statement.

“Today is an exciting and transformational day for our companies, and one that brings with it tremendous opportunity for our future success. 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 Chairman and CEO.

“With our enhanced capabilities, we will deliver value to our customers by anticipating and addressing their most complex challenges, while delivering significant value to shareowners.”

“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Greg Hayes, United Technologies Chairman and CEO.

“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.”

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