Raytheon Company and United Technologies Corp. announced Sunday they agreed to an all-stock merger that it called “a merger of equals.”
The combined company, which will be named Raytheon Technologies Corporation, will have an estimated $74 billion in 2019 sales, which would make it the second-largest defense and aerospace company in the U.S. after Boeing.
“The transaction will create a premier systems provider with advanced technologies to address rapidly growing segments within aerospace and defense,” said a release from the two companies.
Raytheon Technologies will have a combined worth of almost $166 billion when the merger completes in early 2020.
“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Greg Hayes, United Technologies chairman and CEO, in a statement. “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.”
The merger will bring a variety of defense technology, including the F-35 fighter jet, Patriot and Tomahawk missile systems, space suits, intelligence technology, and Pratt & Whitney engines used in both commercial and military aircraft, under the auspices of a single company.
Raytheon stockholders will receive 2.3348 shares in the combined company for each share of the original companies. United Technologies shareholders will own 57% of the new firm and Raytheon shareholders will own 43%.
“It’s largely a diversification play to build an absolute behemoth aerospace and defense contractor,” Douglas Rothacker, an aerospace defense analyst, told the Associated Press.
President Trump voiced opposition to the merger in a CNBC interview Monday, saying, “It becomes one big, fat beautiful company, but I have to negotiate, meaning the United States has to buy things. Does that make it less competitive?”
