Costs for the company could eventually be
trimmed by $1 billion each year as it strips away
duplicative functions.
The combined company would be valued at well
over $100 billion even after United Technologies
completes the planned spin-off of a good chunk
of its commercial, industrial wing. The deal is
expected to close in the first half of 2020, after
those assets are shed by United Technologies.
“The combination of United Technologies and
Raytheon will define the future of aerospace and
defense,” said Greg Hayes, United Technologies
chairman and CEO, who will become the CEO of
the combined company.
The companies will push to develop new
technologies more quickly with combined R&D
spending of $8 billion annually and more than
60,000 engineers. Raytheon Technologies will
focus on hypersonics — vehicles or weapons
which can fly five times faster than the speed of
sound — as well as intelligence and surveillance
systems, artificial intelligence for commercial
aviation and cybersecurity for connected planes.
The deal would push United Technologies
further from the cyclical nature of its
commercial businesses, and more deeply into
the defense sector.
Industry analysts saw fewer advantages for
Raytheon, but noted that it has ensured that it
is not left behind in the push to grow bigger in
aerospace and defense.
“The rationale seems to address (United
Technologies’) needs more than Raytheon’s,
unless this was also about simply finding the
best partner in a consolidating space,” wrote
Joseph DeNardi, a defense analyst with Stifel.