United Technologies + Raytheon: Becoming the #2 Player in Aerospace & Defense

A United Technologies Raytheon merger has long been speculated on by analysts and investors

United Technologies Corporation is poised to combine its aerospace business with Raytheon in a merger that would create a giant with a market value of more than $100 billion.

"I think once [President Trump] understands the benefits of this merger in terms of what it's going to do to reduce costs to the government, what it's going to do to improve the technology of the USA government and our defense profile, and what it's going to do for jobs in this country, I think he's going to be supportive, as he has been for both companies over the course of this administration", United Technologies Chairman and CEO Greg Hayes told CNBC soon after the president called in. 68% of Raytheon's revenue comes directly from USA government contracts with an additional 13% going to foreign military sales through the USA government, totaling 81% of Raytheon's top-line being related to the United States government. The merger is expected to be wholly in the first half of 2020 once United Technologies has completely separated from Otis and Carrier. Companies have argued that they need greater scale to compete and spend on research and technology. United Technologies reportedly employs 240,000 and is presently headquartered in Farmington, CT.

"I want to see that we don't hurt our competition", Trump said in an interview with CNBC.

"UTX also gets to de-lever with Raytheon's balance sheet and Raytheon holders get compensated in return".

Hayes will become the CEO of Raytheon Technologies.

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

More news: Democrats push ahead with hearings on Mueller's Russian Federation probe

"Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution", said United Technologies Chairman and CEO Greg Hayes in a statement. "It becomes one big fat handsome company, but I have to negotiate, meaning the United States has to buy things".

We have reached out to Raytheon Tucson for a response to this report.

In Northrop Grumman's purchase of Orbital ATK previous year, the FTC noted in a statement accompanying the approval that it worked closely with the Defense Department on the review, and had the department appoint someone to oversee compliance of the consent decree.

The combined companies will have total sales of approximately 74 billion dollars in 2019. United Technologies' subsidiaries tend to operate as parts suppliers for other companies' prime contracts, and not as defense platform providers; Pratt & Whitney builds the engine that powers Lockheed Martin's F-35 Joint Strike Fighter, for example. The United Technologies-Raytheon merger would be the biggest ever in defence. Another crucial customer is the U.S. Department of Defense.

Updated 6/9/19 at 9:00 PM with information about the location of the new company's headquarters.

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