United Technologies has said it is on track to separate its Carrier air conditioning and Otis elevator businesses, leaving the company focused on its aerospace business through its $23 billion acquisition of Rockwell Collins, which was completed in 2018, and the Pratt & Whitney engines business. United Technologies Corporation, comprised of Collins Aerospace and Pratt & Whitney, is headquartered in Farmington, Connecticut.
In the same interview, Raytheon Chairman and CEO Thomas Kennedy said the combination seeks to take advantage of the growing interest of the USA military in hypersonic missiles as well as guidance and control systems.
Under the deal, Raytheon shareholders will receive 2.3348 shares in the merged company for each Raytheon share and the new company will assume about US$26 billion in net debt.
Apart from developing new and critical technologies, the companies want to make advancements in developing hypersonics and future missile systems and directed energy weapons. "Before the combination, the lion's share of Raytheon's revenue came from the Pentagon and US intelligence agencies".
"When I hear United Technology, which is a great company, I know it well...but when I hear United and Raytheon...are merging, does that take away more competition?" The company's board will have eight directors from United Technologies and seven from Raytheon. And the company will develop new and critical technologies faster and more efficiently than before.
Trade tensions between the United States and China were blamed at least partly by analysts for that delay, but a source close to the deal said the companies did not expect this to be repeated because Raytheon does not do business in China.More news: Alex Morgan goes Steph Curry with goal celebration
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Sen. Chris Murphy, D-Conn., said he intends to work closely with state government officials, the Justice Department and the Pentagon to "to ensure this merger does not violate the agreement UTC signed with the state". "We truly believe that we're going to get this done relatively quickly", Gregory Hayes, chief executive officer, United Technologies, said in a call with analysts.
The companies' pitch also emphasized the upside in terms of technological breakthroughs through an $8 billion research and development budget, 60,000 engineers and 38,000 active patents.
"I'm a little bit concerned about United Technologies and Raytheon", the president told the television network CNBC.
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.
Hayes called the deal "a stock merger of equals", and said it would result in cost and revenue synergies that will save its customers money and result in bigger dividends for shareholders.
The merger, the largest of the year so far, will have to be approved by competition authorities and was questioned by president Donald Trump on Monday.