Farmington-based United Technologies Corp. and Raytheon are joining forces to create an aerospace and defense powerhouse. It is one of the biggest corporate mergers of 2019.
The two companies announced Sunday that they have agreed to combine in an all-stock deal they termed a “merger of equals.” The new company would have annual revenue of about $74 billion. Together, UTC and Raytheon are worth about $166 billion in market value now. UTC makes up the lion’s share of that.
Under the terms of the deal, United Technologies shareholders would own 57 percent of the combined company, with Raytheon shareholders owning the rest. The newly combined company will be based in the Boston area, according to published reports, which means Connecticut is likely to see some job losses from the deal.
“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” Greg Hayes, United Technologies chairman and CEO, said in a news release. The Wall Street Journal reported Saturday that a deal was in the works.
UTC is an industrial conglomerate, and makes everything from jet engines to elevators. It owns the Pratt & Whitney engine maker as well as Collins Aerospace. Raytheon is rooted in defense, and produces missile defense systems and cybersecurity solutions. The companies supply the likes of Airbus and Boeing.
The combined company will be named Raytheon Technologies Corporation, according to a statement from the companies. It will offer “expanded technology and R&D capabilities to deliver innovative and cost-effective solutions aligned with customer priorities and the national defense strategies of the U.S. and its allies and friends,” the companies said.
The combination comes months after UTC announced that it would spin off its Otis elevator division and Carrier building systems unit — a breakup meant to help the remaining company focus squarely on aerospace. The merger with Raytheon excludes those companies, which are expected to separate from UTC in the first half of next year.
Connecticut’s political leaders quickly reacted to news of the deal Sunday.
Gov. Ned Lamont said late Sunday that “it’s important to note that nearly all of UTC’s 19,000 employees will remain in Connecticut, with roughly 100 moving to the new headquarters.”
“I’ve spoken directly with Greg Hayes and made it clear that Connecticut will always be open should things change, as they often do,” Lamont said. “This serves as reminder that we live in an increasingly competitive economy, domestically and internationally. As such, it’s critical we invest in education, workforce development, and our transportation infrastructure to stay competitive.”
Congressman John B. Larson said “Anytime there is a merger, it understandably creates anxiety.”
“We have been assured by UTC that their manufacturing base in Connecticut will remain strong, helped by the efforts of the Connecticut Delegation in Washington and Governor Lamont in Connecticut to bolster our state’s defense manufacturing ecosystem,” he added. “The FY2019 defense bill enacted last year was a huge win for our state’s defense manufacturing ecosystem by including 93 F-35’s, $11 billion for submarine programs, and over $3.5 billion for helicopter programs. We will also be voting on the FY2020 this week that includes funding for 90 F-35’s, which is more good news for Connecticut.”
Â
HBJ staff contributed to this story.
