Raytheon and United Technologies agree on a peer-to-peer merger

Raytheon and United Technologies announced Sunday their merger as part of an agreement on all actions, which would create a real monster in the rapidly growing sectors of defense and aerospace.

The merger, which the two companies described as a "merger of equals", would bring together the burgeoning sector of United Technologies' aerospace industry that manufactures jet engines, badpit controls and pbadenger seats. Aircraft with missile manufacturer Tomahawk Raytheon.

The companies would have combined annual sales of about $ 74 billion, the companies said. That would make the new company, they plan to call Raytheon Technologies, the second largest aerospace and defense company in the United States in terms of revenue, behind Boeing.

"The combination of United Technologies and Raytheon will define the future of aerospace and defense," United Technologies President and Chief Executive Officer Greg Hayes said in a statement. "By joining forces, we will have unparalleled technology and extensive research and development capabilities that will allow us to invest throughout economic cycles and meet the highest priorities of our customers."

United Technologies has benefited from the growing demand for aircraft worldwide and has strengthened its aerospace business, which includes jet engine manufacturer Pratt and Whitney. In November 2018 he concluded the acquisition of Rockwell Collins.

The two companies have little overlap and may not be subject to strong regulation, said Richard Aboulafia, an aerospace badyst at Teal Group.

The new company would be headquartered in the Boston area, the two companies announced in the statement. Raytheon is based in Waltham, Mbadachusetts, a suburb of Boston.

If completed, shareholders of United Technologies, based in Farmington, Connecticut, would own 57% of the new company, compared to 43% for Raytheon, after dilution.

The transaction is expected to be finalized in the first half of 2020, announced the companies.

Like other industrial conglomerates, United Technologies is asking companies to focus on highly profitable units. It is splitting its Otis elevator business and Carrier air conditioning unit into separate companies. The merger with Raytheon will not affect this process and the closure is on track in the first half of 2020, companies said Sunday.

United Technologies chief executive Hayes would become CEO of the merged company, and Raytheon's CEO Thomas Kennedy would become chairman. Two years after the conclusion of the agreement, Hayes would become president.

Raytheon and United Technologies have a combined market value of nearly $ 166 billion. The shareholders of Raytheon will get 2 3348 shares of the new company for each Raytheon share, announced the companies.