Raytheon Technologies Corporation: UTC, Raytheon make marriage official

Trump says United Tech Raytheon deal may hurt competition

Raytheon Technologies Corporation: UTC, Raytheon make marriage official

The deal announced on Sunday will create the world's second largest aero-and-defense company by sales behind Boeing Co and allow Raytheon to expand into commercial aviation while reducing United Technologies' dependence on aerospace.

Callan also sees "some overlap in the defense portfolios" for the two companies, primarily through the Mission Systems segment of Collins Aerospace. Those will be joined by Collins Aerospace and Pratt & Whitney.

Pratt & Whitney, which operates as a subsidiary of United Technologies, builds the engines that power Airbus' A220, and A320neo and A380 commercial jets.

The combined company, named Raytheon Technologies, will be based near Boston.

The deal is expected to close in the first half of 2020. The combined company would employ more than 60,000 engineers, would have about 38,000 active patents, and would have enough financial firepower to invest $8 billion each year in research and development, they said.

Under the deal, Raytheon shareholders will receive 2.3348 shares in the new company Raytheon Technologies for each Raytheon share and the new company will assume about $26 billion in net debt.

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A person familiar with the matter told the newspaper that United Technologies is likely to own a majority of the combined company.

The deal is expected to close in the first half of 2020, the companies said in the joint statement. The merger is meant to qualify as a tax-free reorganization for USA federal income tax purposes.

Throughout the release, the companies cite the ability to increase R&D investment across the board as one benefit of the agreement, with focus areas to 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". "With our enhanced capabilities, we will deliver value to our customers by anticipating and addressing their most complex challenges, while delivering significant value to shareowners".

"UTC's current leader, Greg Hayes, will serve as CEO of the merged company, with Raytheon CEO Thomas Kennedy as chairman for two years". "Our two companies have iconic brands that share a long history ofinnovation, customer focusand provenexecution".

"By joining forces, we will have unsurpassed technology and expanded R&D capabilities", Hayes said. "Merging our portfolios will also deliver cost and revenue synergies that will create long-term value for our customers and shareowners".

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