Merger would boost Raytheon in aerospace and defense
David Wagman | June 10, 2019Raytheon and United Technologies said they plan to combine in an all-stock merger of equals to focus on providing advanced technologies for rapidly growing segments within aerospace and defense.
The combined company would be named Raytheon Technologies and would include Collins Aerospace and Pratt & Whitney. The deal excludes Otis and Carrier, which are expected to be separated from United Technologies in the first half of 2020.
If the merger is completed, the combined company would have roughly $74 billion in pro forma 2019 sales.
Under terms of the agreement, Raytheon shareowners would receive 2.3348 shares in the combined company for each Raytheon share. United Technologies shareowners would own around 57% and Raytheon shareowners around 43%. The merger could close in the first half of 2020.
Technology focus
Areas of joint technology development include hypersonics and future missile systems; directed energy weapons; intelligence, surveillance and reconnaissance (ISR) in contested environments; cyber protection for connected aircraft; next-generation connected airspace; and advanced analytics and artificial intelligence for commercial aviation.
Raytheon plans to consolidate its four businesses into two businesses to be named Intelligence, Space & Airborne Systems and Integrated Defense & Missile Systems. The new businesses will join Collins Aerospace and Pratt & Whitney to form the four businesses of Raytheon Technologies.
The combined company's board of directors will be comprised of 15 members, consisting of eight directors from United Technologies and seven from Raytheon, with the lead director from Raytheon. Tom Kennedy will be appointed executive chairman and Greg Hayes will be named CEO of Raytheon Technologies. Two years following the close of the transaction, Hayes will assume the role of chairman and CEO.
Raytheon Technologies will be based in the greater Boston metro area and will retain a corporate presence in existing locations.
The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals, the approval of Raytheon and United Technologies shareowners, as well as completion by United Technologies of the separation of its Otis and Carrier businesses.
