Raytheon, United Technologies Merger Will Create a New Aerospace Giant (npr.org) 45
The Raytheon Co. and United Technologies Corp. are merging in an all-stock deal that the two companies say is a merger of equals. The new company's name will be Raytheon Technologies Corp. -- and it's expected to have nearly $74 billion in annual sales. NPR reports: The new defense and aerospace company would be second only to Boeing in the U.S., according to the latest Forbes 500 rankings by annual revenue. On that list, Boeing had more than $101 billion in revenue while another rival, Lockheed Martin, racked up $53.7 billion, according to Forbes. "The combination of United Technologies and Raytheon will define the future of aerospace and defense," United Technologies Chairman and CEO Greg Hayes said in a statement about the deal. Hayes is set to become the leader of the new company: He'll take the titles of chairman and CEO two years after the merger is finalized.
Under the deal, United Technologies' shareholders will own about 57% and Raytheon shareholders will own about 43% of the merged company. Both Raytheon's and United Technologies' board of directors have unanimously approved the merger, which is expected to close during the first half of 2020. The headquarters of Raytheon Technologies will be in the Boston metro area, the companies say. Raytheon is currently based in Waltham, Mass., while United Technologies is based in Farmington, Conn. Under the deal, the new Raytheon Technologies will consolidate its operations into four businesses. One will be based on intelligence and aerospace and another based on defense and missile systems. Those entities will join Collins Aerospace (the recently acquired Rockwell Collins Inc.) and jet engine-maker Pratt & Whitney -- two of United Technologies' high-revenue divisions.
Under the deal, United Technologies' shareholders will own about 57% and Raytheon shareholders will own about 43% of the merged company. Both Raytheon's and United Technologies' board of directors have unanimously approved the merger, which is expected to close during the first half of 2020. The headquarters of Raytheon Technologies will be in the Boston metro area, the companies say. Raytheon is currently based in Waltham, Mass., while United Technologies is based in Farmington, Conn. Under the deal, the new Raytheon Technologies will consolidate its operations into four businesses. One will be based on intelligence and aerospace and another based on defense and missile systems. Those entities will join Collins Aerospace (the recently acquired Rockwell Collins Inc.) and jet engine-maker Pratt & Whitney -- two of United Technologies' high-revenue divisions.
Interesting (Score:2)
UTC sold Sikorsky to Lockheed largely because their business model couldn't accommodate years long lead times on R&D return on investment.
Wonder what's changed.
Money (Score:2)
Re: Money (Score:1)
I want old /. back where everyone collectively agreed Bill Gates was an alien supermutant trying to destroy Earth through software and shady business tactics. Now everyone here seems to be a bunch of racist Trumptards from 4chan.
Great! (Score:2)
I suppose they'll control and regulate themselves until planes fall out of the sky here as well.
Union Aerospace Corporation (Score:2, Funny)
Any chance of it being called the Union Aerospace Corporation ?
I sure hope they don't have any plans for Mars.
Too many megacorps. (Score:5, Insightful)
I truly don't understand why the government keep approving the merging of these behemoth corporations. The resulting megacorps have demonstrated time and time again that they are juggernauts that will plow over competitors using any means means necessary. We need to break up megacorps, not make more of them.
Re:Too many megacorps. (Score:4, Funny)
I'm just hanging out for them to actually go to war with each other. With cyber-enhanced former spec-ops methedrine addicts who wear greatcoats and mirror-shades and who ride electric motorcycles dangerously.
Re:Too many megacorps. (Score:5, Insightful)
The people who approve these mergers eventually sit on the boards of the company when they "retire".
Re: (Score:2, Interesting)
Exactly,
Look at The Case Against Breaking Up Big Tech Companies [slashdot.org]
Just a few days ago that story was talking about the improbability of splitting big tech companies and the solution was to create competitive technology... now... with this kind of merge... what fucking competition will arise? I mean, every time a new company with a new fucking technology or concept or whatever you want to call it appears then is bought by any those mother fucker big shitting ass companies ( remember Youtube? it wasn't created b
Re: (Score:1)
I think the argument is that they can pool investments and better compete against global entities. And when it comes to my country's mega corps versus yours, I want mine to have the advantage. Where things get rotten is on the domestic front. Tax payers and consumers get shafted.
state companies (Score:2)
Merging private companies into ever bigger behemoths is bad. Bad for consumer prices, bad for worker wages, bad for democracy.
Buuuuuut... the companies under discussion here aren't really private. They are quintessential state companies. I know we don't call them state companies, but it's quite obvious they are. These two companies are inconceivable without their ties to the US military. They receive the overwhelming bulk of their revenue from Uncle Sam. They are integral parts of the US military.
Like the
Less Competition Means More Expensive Weapons (Score:1)
The merger of Raytheon and United Technologies has only one significant consequence: the reduced competition means higher prices for weapons like missiles and fighter aircraft.
Consider the F-35 produced by Lockheed Martin. A report [bgov.com] by Bloomberg Government states, "Each Air Force F-35 will cost about $47 million more to buy and sustain over a decade than the F-15X ..." Is the F-35 worth the additional cost of $47 million?
The American industry for military hardware needs less consolidation and more competi
Re: Less Competition Means More Expensive Weapons (Score:2)
Competition is irrelevant for military procurement. Foreign competition is doubly irrelevant.
The real reason our new weapons are so expensive is our military doctrine of absolute technical superiority versus "near peer" rivals. This superiority must be maintained despite the complete collapse of the national industrial base, and concomitant decline of national engineering capacity.
Under these conditions, military technical superiority is achieved by cranking up the printing press and throwing preposterous b
Cost Reduction and Quality (Score:3, Informative)
This isn't always the case with mergers, but it isn't entirely a bad thing. Hear me out. There is still Lockheed Martin, Northrop Grumman, General Dynamics, Boeing, and many other big companies in the business, so there is still some competition.
I have worked at a facility with government contracts before. The facility I was at had contractors from several companies, often performing very similar roles. It sounds strange, but this sort of thing could actually save the tax payer some money. Instead of having 2 24x7 support contracts with 12 people each from 2 different companies, if they were to merge, the total people could be reduced from 24 to 18.
There were actually quite a few contractors and products from smaller companies where I was at.
Another possible upside is better quality in some cases. Since multiple companies had stuff on the same network performing similar functions, data storage for different applications for example, the storage systems could be consolidated resulting in better performance and lower costs.
The way some contracts work is performance based. Take cruise missiles for example (no, I didn't work with cruise missiles). It would be expected that if an agreed upon number of cruise missiles don't work as advertised, say it misses its target or its warhead fails to detonate, the amount the government pays for the contract drops significantly.
Seven (Score:2)
Which makes them partly competitive. An industry needs about 7 competitors to be sufficiently competitive. Some studies will say at least 5, others 10, but they seem to average around 7. Beyond 7, then benefits of yet more competitors is insignificant.
Re: (Score:2)
When I worked in the defense industry the contractors always played what was known as "launch chicken", where "launch" referred to the date the satellite was to be...ahh...launched.
The "chicken" part referred to the fact that all of the contractors were behind schedule, but only the first to admit it was penalized - the others were rewarded with a schedule slip and compensation for the extra time. So at every status meeting they would sit around the table and report that they were on track for the launch d