Trump Raises Possible Concerns Over Raytheon-United Technologies Merger Plan
Jun 13 2019
"By joining forces, we will have unsurpassed technology and expanded R&D capabilities", Hayes said.
The companies are aiming for the merger to be complete by the first quarter of 2020, Hayes reported.
"Under Secretary of Defense for Acquisition and Sustainment Ellen Lord is engaging with industry leadership to understand the implications and governance as a result of this acquisition", the statement said.
United Technologies has deep roots in CT and its businesses - Pratt & Whitney, Collins Aerospace, Otis elevators and Carrier heating, cooling and security - have created thousands of indirect jobs at local businesses.
But the proposed merger, which would create a defense giant with $74 billion in sales, may hit some bumps in the road on the way to completion.
Raytheon share price is slightly growing after announcing a merger with United Technologies.
Mr Trump said the merger would harm competition and make it more hard for the United States government to negotiate defence contracts.
Trump told CNBC that he was a "little concerned" about the deal and that while he would like to see it go through he added: "I want to see that we don't hurt our competition".
"I hope the Raytheon deal, I hope it can happen". Their merger would create a one-stop shop that produces and sells everything from radar systems to fighter and passenger planes, a market dominance that could make many big players like Lockheed Martin, Boeing, and General Electric nervous. The deal will return $18 to $20 billion back to shareholders in the first 36 months after closing, expected in the first half of 2020, the companies said in an announcement on Sunday.
The blockbuster deal caps a dramatic revamp of United Technologies under Hayes, who took the reins at the industrial conglomerate in 2014 with a vow to pursue big transactions.
The deal will be reviewed by either the Justice Department or the Federal Trade Commission to ensure that it complies with antitrust law.
UTX and RTN have followed in the footstep of Harris (HRS) and L3 Technologies (LLL), which a year ago announced an all-stock merger.
Analysts say a merger of UTC, whose divisions include the aero-engine maker Pratt & Whitney, and Raytheon, maker of the Tomahawk and the Patriot missile systems, would be likely to re-shape the defence sector as other firms look to consolidate. "Raytheon Technologies will continue alegacy of innovation withan expanded aerospace and defense portfoliosupported by the world's most dedicated workforce", said Tom Kennedy, Chairman and CEO of Raytheon. Mr Hayes will ascend to both roles three years after the deal closes. And the company also expects to capture more than $1 billion in gross annual run-rate cost synergies by year four post-close with approximately $500 million in annual savings returned to customers.
Citigroup Global Markets was the financial adviser to Raytheon while RBC Capital Markets provided a fairness opinion and Shearman & Sterling was legal adviser to Raytheon.
United Technologies fell 1.7% to $125.84 at 9:51 a.m.in NY, posting the biggest drop on the Dow Jones Industrial Average for the second straight day.