Raytheon and United Technologies made headlines by announcing a merger that will create one of the world’s largest aerospace and defense companies. The combined company will feature an impressive portfolio that includes the F-35 fighter jet engine, Patriot and Tomahawk missile systems, astronaut suits and Pratt & Whitney engines used in both commercial and military aircraft. The company could generate annual revenues close to $74 billion.
The company is rumored to be renamed Raytheon Technologies Corporation. It’s ability to leverage suppliers and contractors when competing with the likes of Lockheed Martin and Northrop Grumman, while simultaneously eliminating duplicate roles, could translate in annual cost savings of $1 billion. The new enterprise could be valued at well over $100 billion, even after United Technologies completes an anticipated spin-off of most of its commercial business. The merger is expected to be finalized in the first half of 2020, following the sale of those United Technologies assets.
The combined research and development resources of the two companies will provide over $8 billion and 60,000 engineers in propelling the timetable for developing new technologies. According to a report by the Associated Press, the new company will primarily focus on hypersonics — vehicles and weapons capable of traveling at five times the speed of sound. Aerospace AI, surveillance systems, and cybersecurity will also be prominent.
Once the merger is complete, shareholders from United Technologies will own approximately 57 percent of the company, with Raytheon shareholders owning the remainder. Despite concerns from President Trump regarding a potential lack of competitive options, the companies do not anticipate pushback from anti-monopoly regulators.