The merger of Raytheon and United Technologies was announced on Sunday gives them a top position in the fast-emerging aerospace and defense sectors.
The merger combines the two forces; United Technologies, who specializes in production of everything connected with the aerospace business and Raytheon, who is an expert in production of Tomahawk missiles. This combined force will chalk out the future of the defense and aerospace industry in the years to come and work towards addressing top priorities of their customers; United Technologies chairman and CEO Greg Hayes stated.
The merged company slated to be called Raytheon Technologies will rank next to Boeing in terms of revenue in the US. The yearly sales would be about $74 billion. A press release disclosed the headquarters of the new company to be located in the city of Boston. Shareholders of United Technologies would get 57% stake while those of Raytheon’s would obtain 43% stake on a diluted basis in the new company. Raytheon shareholders will get shares in the ratio of 1:2.3348 in the new company. The total market value of the new company would amount to about $166 billion.
The deal is slated to complete before the end of first six months of the following year. The CEO of the new company would be the current chief executive of United Technologies, Greg Hayes while the chairman would be CEO of Raytheon, Thomas Kennedy. On completion of two years from the deal it would be the turn of Hayes to be the chairman of the new company.
United Technologies, meanwhile is focusing on the more profitable units and its Carrier air conditioning and Otis elevator businesses will soon be spun into separate units. However, this process will not be related in any way to the merger with Raytheon, which shall be completed within the targeted time period.