Americas

Merger announced between Raytheon and United Technologies

  • Share this:
Merger announced between Raytheon and United Technologies

Defence specialists Raytheon Company and United Technologies, which comprises of Collins Aerospace and Pratt & Whitney have entered into a merger agreement.

The combined company, which will be named Raytheon Technologies Corporation, will offer expanded technology as well as research and development capabilities to deliver innovative and cost-effective solutions aligned with customer priorities.

The combined company will have approximately $74 billion in pro forma 2019 sales. With a strong balance sheet and robust cash generation, Raytheon Technologies will enjoy enhanced resources and financial flexibility to support significant research and development; as well as capital investment through business cycles.

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% and Raytheon shareowners will own approximately 43% 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. The merger is intended to qualify as a tax-free reorganization for US federal income tax purposes.

“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.”

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

“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.”