United Technologies' shareholder, Bill Ackman, sent a letter opposing a mega deal with Raytheon


Bill Ackman, founder and CEO of Pershing Square Capital Management.

Adam Jeffery | CNBC

Activist investor Bill Ackman urges United Technologies to forgo its $ 100 billion merger with Raytheon, a source close to CNBC's confirmed record.

Ackman, whose Pershing Square Capital Management held 5.8 million shares of United Technologies at the end of the first quarter, said in a letter that the merger was misguided. Ackman had previously encouraged United Technologies to rationalize its operations by splitting parts of the conglomerate.

The fund manager sent a letter to United chief executive Greg Hayes on Sunday morning after learning that the company was in merger talks with Raytheon, the source told CNBC. Pershing Square refused to comment on the letter.

In a statement to CNBC, United Technologies said: "We are confident that our shareholders will see the merits of this transaction and the value it brings to them, as well as to the company." We will work diligently in the coming days and weeks to ensure that the details of the transaction are presented to all shareholders and fully understood by them. "

The Wall Street Journal first reported the opposition of Ackman.

The shares of both companies changed little on Tuesday afternoon.

On Sunday, Raytheon and United Technologies announced plans to merge an all-stock deal to create a new company that they plan to call Raytheon Technologies. The companies had combined sales of $ 74 billion a year. This would make the new company the second largest aerospace and defense company in the United States in terms of revenue, behind Boeing.

"By joining forces, we will have unparalleled technology and extensive research and development capabilities that will allow us to invest throughout business cycles and meet the top priorities of our customers," he said. Hayes, who is expected to become the CEO of the new company.

– Leslie Josephs and Christine Wang of CNBC contributed to this report.


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