Raytheon windfall as US duo create $120bn aerospace powerhouse
Shareholders in Raytheon Company, which has a major division in Harlow, are set to share up to $20 billion in a return of capital as the business merges with fellow US giant United Technologies to create a $120 billion aerospace and defence power player.
The respective boards said the combination would create a premier systems provider with advanced technologies to address rapidly growing segments of aerospace and defence.
They plan expanded technology and R & D capabilities and joining forces will result in more than $1bn of gross annual cost synergies by year four, as well as new revenue opportunities from the combined technology.
The return of capital to shareowners of $18bn-$20bn has been pledged within the first 36 months following completion of the merger.
Raytheon is a defence industry world leader while United Technologies is a major force in aerospace.
The combined company will be named Raytheon Technologies Corporation and will primarily serve the US and its allies. It will have approximately $74bn in pro forma 2019 sales.
The deal has been unanimously approved by the boards of both companies and the merger is expected to close in the first half of 2020.
Raytheon plans to consolidate its four businesses into two – to be branded Intelligence, Space & Airborne Systems and Integrated Defense & Missile Systems. The new businesses will join Collins Aerospace and Pratt & Whitney to form the four businesses of Raytheon Technologies.